There is no definitive right or wrong way to invest as by definition the future is unknowable.
At Blackdown Financial we have a clear investment philosophy which guides us in the construction of the portfolios for our clients. This philosophy is backed by decades of academic research and is reviewed regularly by our investment committee.
There are four principles to our philosophy:
1) Markets are broadly efficient (trying to beat the market consistently after costs is difficult)
2) Fund management costs matter (a lot)
3) Diversification is key (eggs in basket)
4) Risk and return are related (higher expected returns = higher expected risk)