BOTTOM LINE
MICHEL PIREU: Know thyself a key mantra in evidence-based investing
Investment professionals differ on the laws that govern markets but it is crucial for investors to control their behaviour
If asked to describe evidence-based investing in 10 words or fewer, it would be tempting to say it’s simply making decisions on things you know to be true. “But ask 10 different investment professionals what is evidence-based investing and you’re likely to get 10 different answers,” says Michael Batnick at The Irrelevant Investor. “Not different variations, but completely different responses. One person’s evidence is another person’s nonsense. It’s not easy to come up with a list of evidence, of iron laws that govern markets … But if I had to point to one thing, and proclaim ‘here is what the evidence says’, it’s that investors need to figure out how to control their behaviour, and past behaviour is a pretty good indicator for future behaviour. So, if you have figured out how to combat your inner saboteur, you are an evidence-based investor.” Philip Huber, chief investment officer for Huber Financial Advisors, agrees and says the one thing he has learnt about evidence-based investin...
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