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Our investment philosophy
Investment management
How our approach works
At Bridgewater, we don’t spend time unnecessarily trying to predict and time the market. Our investment philosophy is based on evidence and Nobel Prize-winning research. We believe in selecting well-managed, low-cost, systematically managed funds to give you the best chance of capturing the bulk of the market returns on offer.
Lifelong beliefs
To help you better understand how our approach works, we have outlined our five lifelong beliefs:
1.
Have confidence in the markets
2.
Allow the markets to do the heavy lifting
3.
Risk and return are always related
4.
Be patient and think long term
5.
Stay disciplined. Time is your friend.
Practices we follow
These five beliefs work in tandem with the five practices we follow:
1.
Build a well-structured portfolio
2.
Diversification is a must
3.
Avoid cost leakage from your portfolio
4.
Use a systematic, disciplined approach
5.
Manage risks carefully across time.
How it works
Building your portfolio
Using the above beliefs and principles, we will construct a portfolio for all seasons. We start by deciding what asset classes to invest in and what to avoid. These are based on the ability of each asset class to meet our predetermined selection criteria.
We then select the growth and defensive assets – the two components of your portfolio.
Next, we make the most important decision: balancing growth assets and defensive assets in a way that is most suitable for you. We will understand your tolerance to risk, understand the worst magnitude of any falls in the value of your portfolio so you could survive financially, and finally, establish how much risk you need to take to achieve your goals.
The next step is to implement the strategy using systematic, not judgmental funds. We do things according to a disciplined system that is efficient, methodical and objective. Low cost – is key. This approach is sometimes referred to as passive investing or index tracking. Logic and evidence drive us towards a systematic approach.
