Core Investment Philosophies
At Flagstone Financial Management, we have numerous core investment philosophies. In order for a client to have a positive investment experience, it works best if you share those core investment philosophies or are at least open to learning why we believe what we believe. Our core investment philosophies are listed as follows:
- Markets Are Efficient – The market’s pricing power makes it difficult for investors to time or outsmart other market participants through stock picking or market timing. In hindsight, there are mispriced securities from time to time, but it is very difficult to consistently know those mispriced securities on a forward-looking basis.
- Cost Matters – The overall costs an investor pays are an important consideration in developing a prudent investment plan. While costs aren't the only factor, we pay close attention to managing the overall costs of the investments we recommend for clients.
- Diversify Globally – It is very hard to predict which areas of the world markets will do better than other areas at any given time. Accordingly, we prefer to broadly diversify investments between multiple investment classes to even the investment ups and downs as much as possible and provide different asset classes among which we can rebalance your portfolio.
- Markets Reward Discipline – Study after study shows the typical investor is not wired to succeed in financial markets. There is an entire field of research in this area called Behavioral Finance. Investors tend to buy high and sell low due to allowing their emotions to drive their investing decisions. We work hard with our clients to avoid the behavioral traps that can lead us to make poor decisions. We do this by sticking with our core beliefs and following a distinct investment process that seeks to take emotion out of decision making moments.
- Optimism Triumphs – There will always be reasons to be pessimistic about investing. If one looks back and focuses on all the scary issues that have confronted the financial markets from the beginning of time, we may all have money stashed under our mattress. Despite these negative aspects, historically the markets have continued to march forward in an inconsistent, but generally positive way. We believe an optimistic attitude towards the markets can provide a better investment experience than a pessimistic attitude.