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Expert Perspective

News, research and market insights from our team of experts.

Investment e.Perspective

Current Issue | April 27, 2017

Oxford’s Investment Philosophy – More Than Mere Words

By: Robert Schaefer, CFA, CFP®, Director, Investment Research & Oxford Investment Fellow


Like many individual investors, professional investment advisors can be their own worst enemies, especially during periods of market extremes. The tech bubble of the 1990's is one such example. Many investment advisory firms and money managers abandoned their investment disciplines in order to chase dot-com "story" stocks offering incalculable growth potential. We know how that ended. Likewise, the near-catastrophic events of the 2008 Financial Crisis prompted numerous professional investors to retreat from equities during just the wrong time, thus preventing their clients from participating in the big rebound that soon followed.

Behind the scenes, one can only imagine the heated conversations that took place amongst members of the investment teams responsible for making those difficult decisions. Think there wasn't disagreement and frustration? Think there wasn't finger pointing within the ranks of management?  Stress has a way of clouding the thought processes of even the most intelligent people - and bringing out their worst.

At Oxford, we understand that we are not immune to similar "amateur" mistakes. It is easy for investment teams to lose their sense of direction for any number of reasons - stressful market conditions, changes in personnel, disappointing recent performance. Decisions that were once easy and obvious become obscured by dissention and impatience when an investment team loses its way. Successful investment teams are able to shut out the distractions and stay focused on what's really important, but how?

Having a thoughtful and well-articulated investment philosophy is one way of minimizing the potential for emotional and faulty decision making. An investment philosophy is a written statement that describes what you believe to be true about investing. It will typically consist of a set of core investment principles/beliefs that serve to impose discipline and guide the processes and strategies of the investment team. An investment philosophy can be thought of as a compass that keeps everyone rowing toward the desired destination, even when the investment seas get rough and the air is full of fog.

As you have probably guessed by now, Oxford has given considerable thought to our own investment philosophy, which is provided below. At its best, a clear investment philosophy is a powerful and enduring tool that serves to successfully guide the thinking and strategies of an investment team through multiple market scenarios. At its worst, an investment philosophy is mere words on paper used to help promote an advisor's services. We believe Oxford's investment philosophy is the former, not the latter. In the future, we look forward to sharing with you specific examples of how we rely on Oxford's investment philosophy to steer our clients toward investment success.

Oxford's Investment Philosophy:

Oxford Financial Group, Ltd. seeks to achieve your investment goals by preserving and growing your assets over a long-term planning horizon. We believe in building highly diversified portfolios that are resilient and robust across a range of potential economic and financial market outcomes. Our investment process is driven by the assumption that financial markets offer periodic mispriced opportunities for astute investors with access to deep analytical resources and intellectual rigor. In the pursuit of achieving your wealth objectives, we are committed to managing portfolio risks, avoiding conflicts of interest and providing superior levels of communication.

Oxford's investment advice is guided by the following six core principles:

  1. Success begins with a long-term plan and ends with the failure to follow it.
  2. No one can predict the future. Investment decisions should be a function of value and risk.
  3. Human emotions (greed, fear, panic) will always create opportunities for the disciplined.
  4. If it's obvious, be skeptical. If it feels uncomfortable, you may be onto something.
  5. Fees and taxes are often the most predictable components of investment returns – and the most controllable.
  6. The only benchmark that truly matters is your success.

The above article represents the opinions of the author as of 10.29.15 and is subject to change at any time due to market or economic conditions or other factors.