Some fundamental principles, summed up in the investment framework, are helpful in modern times to invest smartly across global markets. These financial beliefs should help intelligent investors develop appropriate policies and procedures to build effective long-term asset management strategies.
On an international scale, prominent institutional investors have employed their core principles to shape their choices and to refine their portfolio holdings by eliminating investments that did not align. Moreover, the public dissemination of these investment principles has enabled the members and stakeholders of these funds to critically assess the investment programs, offering deeper insights to inform current and future investment decisions.
The formation of GreenLock's Triangle principles for investing was the result of extensive years of learning, research, and thoughtful deliberation.
1. Diversification improves overall results: enhances the risk-adjusted characteristics of an investment portfolio, reducing the idiosyncratic risk of each active (controllable by the investor). A modern approach based on science instead beliefs.
2. Global markets are almost efficient: cost-effective information processing prevails across major market segments, facilitating swift actions from millions of market participants and making markets more efficient. This dynamic makes it notably arduous to create added value ("generating alpha") nowadays. In this circumstance, increasing numbers of investors prefer low-cost passive portfolio strategies (ETFs). However, specific market segments present scenarios where information processing is intricate and costly, and excess returns can be generated (PE, Ventury funds, etc.).
3. Effectively managing investment costs leads to lasting advantages over the long term: inadequately controlled investment costs can exert a substantial influence on the overall performance of a portfolio. A prudent investor should prioritize assessing, surveillance, and reducing all pertinent investment expenses.
GreenLock is always ready to help our clients to build cost-efficient and risk-optimal solutions for their needs.