Overall investment philosophy for the client is determined by the client, according to his or her specific investment goals and risk/reward parameters.

Investa does not depend on any one investment style or method. History shows that there are periods when a particular investment strategy or technique produces superior risk-adjusted rates of returns and inferior returns. Usually when a particular style or method becomes too popular, it becomes less profitable. Successful investing is both an art and a science.

Since no person or firm has a monopoly on investment wisdom, Investa strives to find and learn from the brightest financial minds. There is no shortage of talent in the investment industry; the real skill is in recognizing who has that talent. Investa believes the wisdom of recognizing who knows comes from experience and having a broad knowledge of investing, economics and social psychology, philosophy, politics, history, and business. Investa managers have access to a private library of over 5000 books in these disciplines.

Investa uses investment mathematics wherever possible to determine the factors correlated to risk and return for the different asset classes and securities. These mathematical factors will fluctuate as market conditions change. Investa uses these factors to estimate the probability distribution of returns in order to maximize the expected return and minimize the expected risk. The objective is to answer the relevant questions for portfolio selection.

For example:

  • When are small cap stocks more likely to outperform larger-cap stocks?
  • Under which market scenarios and economic conditions are price-to-sales ratios better than price-to-earnings ratios at predicting future stock performance?
  • Which stock and index options generate the best option writing income returns commensurate with the risk?

Investa prefers a fundamentally top-down approach to asset selection, seeking to determine those economies, industries, sectors and asset classes that offer the best risk-reward characteristics Then Investa seeks to find the more undervalued industries or sectors in those markets before picking stocks within those industries and sectors using a combination of fundamental and technical analysis. Stocks typically trade on fundamentals over the long-term, and market sentiment and perception over the near to intermediate term.

Investa believes in select diversification across different strategies, asset classes, regions, industry sectors and securities. Diversification is proven to significantly reduce the overall risk of an investment portfolio. Investa typically avoids investment areas that it believes have become too popular, which historically has been a precursor to underperformance and investment losses.

Investa does not provide projections of the future rate of returns on investment portfolios because it believes this to be subjective and therefore indeterminable. For example, given the current low levels of interest rates, bond returns over the past 20 years are unlikely to be repeated over the next 20 years under virtually any scenario.