Magus's investment philosophy follows a rational course of action based on empirical evidence. Most people want to believe in investment gurus and want to think that market timing, stock selection and active management add value, but there is simply no credible evidence supporting the idea that active management enhances investment results over appropriate index benchmarks. Magus can change the way you think about investing, enabling you to have a better investment experience.
Markets throughout the world have a history of rewarding long-term investors for the capital they supply. Companies compete with each other for investment capital, and millions of investors compete with each other to find the most attractive returns. This competition tends to drive prices to fair value, making it difficult for investors to achieve greater returns without bearing greater risk.
Traditional investment managers strive to beat the market by taking advantage of pricing 'mistakes' and attempting to predict the future. Too often, this proves costly and futile. Predictions go awry and managers miss the strong returns that markets provide by holding the wrong stocks at the wrong time. Meanwhile, capital economies thriveónot because markets fail but because they succeed. The futility of speculation is good news for the investor. It means that prices for shares are generally fair and that persistent differences in average portfolio returns are largely explained by differences in average risk. It is certainly possible to outperform markets, but not in general without accepting increased risk.