The core of our investment approach is to remove emotion and speculation and focus on the science and evidence behind successful investing.
The “Random Walk” hypothesis is a financial theory that stock market prices evolve according to unforeseen events and information that cannot predict its future.
There is so much we cannot control when it comes to investing.
Searching for a framework in creating order out of the chaos of capital markets, we discovered evidence that has accelerated in the last forty years and allows financial scientists the data and technology to validate its research. With confidence in markets, connections to the academic community, and focus on implementation, we direct client portfolios where science leads and remove human behavior as the biggest barrier to portfolio performance.
The journey leads to three Nobel Prize winning laureates, and more importantly, the actionable knowledge and technology required to harness higher expected returns.
Percentage of Large-Cap US Active Fund Managers that underperformed the S&P 500 Index over given periods
With proof in hand, the Capital Company entered the field of Evidence Based Investing (EBI).
Evidence Based Investing accommodates investors seeking higher expected returns using financial science to invest in a globally diversified portfolio of rules-based indexes.
Expected returns are embedded in the market itself—letting the collective knowledge of millions of buyers and sellers set security prices. Letting efficient markets do what they do best—drive information into prices—frees us to spend time with clients setting and achieving their financial goals.
It means we take a less subjective, more systematic approach to investing. This allows us to implement consistently through any market cycle.