Change the way you think

Traditional investment managers would have you believe that investing in the market requires the ability to accurately predict what will happen in the future – and they are the ones that can do it. This very premise presents a conundrum for you as an investor. If they could accurately predict which way markets will go why would they tell you?

Wouldn’t they keep this knowledge 
to themselves and profit from it personally?

The answer is surprisingly simple...it is impossible to predict the future in anything in life and investing is no different. Building an investment portfolio isn’t about guesswork; rather it is about working with the market to capture the returns that are there for the taking, based on fundamental and well researched investment principles.

Markets Work

In 1966 Professor Eugene Fama of the University of Chicago developed the efficient market hypothesis, which asserted that stock prices on any given day accurately reflect all known information about that stock. News and events that are unknown or unforseen will change this price, but as we cannot predict what will happen in the future – we cannot forecast what affect this will have on the value of the stock. By recognising that it is nearly impossible to predict 
news and events, we can see that it is impossible to predict future share prices with any long term consistency.

The conclusion from this research was that investors cannot 
identify superior stocks using fundamental information