Grove Wealth Management
Our Investment Philosophy
We match our clients with risk-appropriate portfolios. These comprise globally diversified blends of index funds.
Our investment philosophy is based on five principles derived from academic research, much of which has been recognised with the awarding of the Nobel Prize in Economic Sciences:
- Financial markets are efficient
Prices in free markets fully incorporate available information, and prices change to reflect any unexpected new information so that the current price is the best estimate of a fair price.
- Risk and return are inseparable
While there is no such thing as return without risk, not all risks are rewarded. Long-term historical risk and return data informs Grove Wealth Managements investment selection process, and Grove Wealth Managements Index Portfolios seek to capture the risk factors that have been shown to most appropriately compensate investors for the risks taken.
These risk factors include market, size, value and profitability for equity; and term and default for fixed income.
- Diversification is essential
Diversification both within and among asset classes allows investors to effectively capture the returns offered by the financial markets, in accordance with their risk capacity.
- Structure explains performance
The expected return of a diversified portfolio is determined by its exposure to the compensated risk factors, as explained previously. The high costs and risks of active management are unnecessary and potentially harmful to an investor’s long-term outlook.
- Advisor Advantage
There are distinct and quantifiable benefits to enlisting the services of a passively oriented advisor. These benefits include disciplined re-balancing, tax loss harvesting, asset location and glide path. At Grove Wealth Management we add value by adhering to the principals of controlling costs, maintaining discipline, and tax awareness.
The result: performance driven by a potent combination of philosophy, evidence, process, and execution.