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What is evidence-based investing?

Simply stated, to achieve the best outcome for you, evidence-based (passive) investing makes use of the best available evidence when designing and implementing your investment portfolio. Evidence-based investing aims to capture the returns of the market through a low-cost, long-term investment strategy based on the following principles:

  1. Establish your tolerance for risk and do not accept more risk than you are comfortable with.
  2. Diversify your portfolio using globally diversified exchange-traded funds.
  3. Manage the impact of inflation by investing in a well-balanced portfolio consisting of equities and bonds.
  4. Minimise costs by replacing expensive, actively managed funds with low-cost exchange-traded funds.
  5. Control your emotions, and avoid the noise to ensure you stay the course towards your desired outcome.
  6. Rebalance each year to ensure your portfolio remains aligned with your tolerance for risk.