episode: 13

EBI – Principle #1: Invest in Asset Classes

October 8, 2020

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About This Episode

One of the challenges Canadian investors face is choosing between the sheer number of choices of types, styles, and strategies for investing that are available. To help you to cut through the noise and overwhelm, we’re starting this series on the best investment philosophy for investors, evidence-based investing.

An evidence-based strategy is a scientific approach to investing where investment decisions are based on facts and research on what’s worked for investors over the long-term. Over the next couple of episodes, we’ll be going through the four main principles of evidence-based investing every empowered investor needs to know, starting today with investing in asset classes.

On this episode, Ruben and I talk about the role of evidence-based for the empowered investor, how evidence-based investing is different from alternative approaches like market timing and stock picking, the benefits of an evidence-based investing approach, the four traditional asset classes for investment portfolios, why you should embrace the average advantage, and so much more!

Thank you for listening!

Key Topics:

  • The role of evidence-based investing for the empowered investor (1:53)
  • How this approach reduces overwhelm for Canadian investors (3:00)
  • What is evidence-based investing? (3:48)
  • The four principles of evidence-based investing (4:53)
  • Two popular alternative investment approaches (5:56)
  • The problem with making accurate market predictions (6:34)
  • How market predictions have played out during the current pandemic (7:41)
  • Why I don’t consider a market-timing approach to be a philosophy (9:08)
  • What is stock picking? (9:43)
  • What the evolution of Apple stock shows us about the risks of stock picking (10:22)
  • The difficulty in picking winning stocks (13:16)
  • Defining asset classes (14:26)
  • The four traditional asset classes for investment portfolios (15:42)
  • Breaking down the main asset classes (16:39)
  • Examples of alternative asset classes (17:49)
  • Why we don’t consider hedge funds to be an asset class (18:26)
  • Advantages of asset class investing over market timing and stock prediction approaches (19:42)
  • Making decisions based on asset allocation (20:36)
  • Embracing the average advantage (22:36)
  • Why some investors don’t use an evidence-based investment approach (24:05)
  • Key takeaways about asset class investing (25:44)
  • The power of patience (26:23)
  • And much more!

Meet your hosts

Keith Matthews

Keith Matthews

Partner & Portfolio Manager

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Ruben Antoine

Ruben Antoine

Portfolio Manager

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Marcelo Taboada

Marcelo Taboada

Associate Portfolio Manager

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Thanks for Listening!

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