Our investment emphasis combines historical experience and focuses on using low charging funds with even lower trading costs. We set up risk rated portfolios which suit most of our clients and even have a range of Ethical investments for our more socially responsible investors.
We believe that investing is for meeting long term goals and saving is for short term goals. These two should never be confused. Short term investing is called speculation and is highly unreliable.
We believe that every investor should have an emergency access fund and sufficient reserves to cover their short term needs. Only money that can be set aside for at least three years should be considered for investment and sometimes at least five years would be preferable.
We believe in diversification to spread or reduce risk and no risk that can be diversified away is worth taking.
We believe in liquidity at all times. Holding investments that cannot be liquidated quickly also increases risk and so we usually avoid these.
We believe that an investor’s most important decision is selecting the mix between equities and bonds as this will determine how volatile a portfolio is. We believe that this decision is far more important than choosing which fund to use.
We believe that consistently outperforming markets is very hard. In order to outperform the market an active fund manager must take either individual stock bets or sector bets. Sometimes these bets will be right and sometimes they will be wrong. Taking additional bets in this way increases risk and trading costs. If a fund manager has exceeded the market return then this outperformance can usually be explained by the weighting to either small or value cap stocks and is therefore not necessarily down to skill at picking the right stocks! We therefore believe that it is sensible to use funds that attempt to capture the return of the asset class rather than try to beat it. Every single £1 that is spent on fund management is £1 less in your pocket. Minimising these costs will improve the odds of you achieving your investment objectives.
We believe risk has many dimensions and volatility is just one of those. Investors should carefully also consider inflation risk, the risk of lost opportunity and perhaps most important of all the risk of missing your objectives. Having a steady low risk return is no good if it does not beat inflation and you do not have enough money to live on when you retire for example. We also recognise that your risk profile might change as you go through life and portfolios should be adaptable enough to change with you.
We believe that there is no proven reliable way to time investment markets and it is usually a losing strategy. This is because selling an investment on the way down in order to avoid losing more inevitably means that you will miss the point that the market turns. This bounce back usually produces the highest gains. It is the time that you spend in the market that is important i.e. long term and not trying to guess the short term. Unfortunately investors are not always rational and their emotions guide their investment decisions. We see it as our job to advise you and help you make the right decisions at the right time by rebalancing your portfolio, only when necessary as rebalancing too often serves to increase trading costs.
We believe that because past performance is an unreliable guide to the future then caution should be exercised when using this data. Fund Managers often use past performance data to show their value, only then to underperform significantly in future. There are fund managers that will outperform their chosen index, but there is no reliable way of predicting who they will be in advance. A fund manager that has outperformed historically will not necessarily outperform in future. After all, the FCA does say “past performance is not necessarily a reliable guide to future performance”.
We believe that the further back in time you look data becomes more reliable. In other words we believe that bonds will produce a higher return than inflation in the long term and equities will outperform bonds in the long term. We also believe the small and value stocks will outperform the main index over Time. However, this is not necessarily true for the short term future, we simply don’t know.
Whenever you invest money using an investment fund there are a number of charges that you will have to pay, which you wouldn’t have to pay if you were buying shares or bonds directly. We believe that these costs are worth paying for most individual investors as realistically this is the only way that you can spread your risk sufficiently.
Time Independent’s investment philosophy is based around the following;
  • The future price of a stock is dependent upon future information that is not yet known and is therefore random. This means that there is no reliable method for predicting the future price of a stock in relation to its piers and we do not believe that stock picking adds any value.
  • There is no proven reliable method to time the markets.
  • There is no such thing as an “orphan stock”. Every stock is owned. Therefore, someone who sells a stock because they no longer see it as a good investment is selling it to someone who sees it as the opposite. They cannot both be right.
  • The most important factor in determining your future return is the level of risk. If more return is required then more risk must be taken (or goals must be adjusted downwards).

Wealth is created with four elements alone;

  • A natural resource
  • Intellectual Property
  • Skilled Labour
  • Capital 

Investors do the job of providing capital in the market place. This is how wealth is created. We call this taking part in capitalism.

The lowest risk investment of all would be Treasury Bills, because they are short term loans to the government. The return from Treasury Bills is what we use to assume the theoretical concept known as the “risk free rate of return”.

If you want to get growth higher than the “risk free rate” then you must take part in capitalism by investing. We believe that capitalism owes you a return in line with stock market returns. Sometimes this return will be poor and sometimes good. Higher charges and trading costs within portfolios increase the likelihood that you will experience a return that is lower than the market. If you are not prepared to take full market risk then you can reduce this risk by holding more cautious assets such as bonds.

To request a full copy of our investment philosophy