Our investment philosophy

Our Investment Philosophy is based on academic research from some of the top investment researchers in the field, including Nobel prize-winning Economic Scientist, Eugene Fama.

Our approach to investing is rooted in four key principles:

1. Asset allocation

One of the most important investment decisions we make is what assets to invest your money in. Asset allocation is the starting point for any investment strategy.

We subscribe to Modern Portfolio Theory (MPT) – a mathematical quantification which demonstrates the benefits of diversification. We’re happy to go into lots more detail if mathematical quantification is your thing, but if it isn’t, we can simply summarise it in the following way:

By combining different types of assets, your collective investments will have a lower level of risk than if your money was held in a single pot.

This works because different assets may move independently of each other. For example, during a recession, equities usually fall in value, but bonds often rise; therefore, a diversified portfolio will be less volatile than one made up exclusively of equity securities. That’s why five of our seven portfolios have both bonds and equities in them.

2. Cost

We believe that cost is a critical factor in selecting a product or investment fund and therefore we select companies with good financial strength and levels of service, as well as funds that are low cost.

3. Tracking the Market

We believe it is pointless to search for undervalued stocks or to try to predict trends in the market through either fundamental or technical analysis. We believe in passive investment.

Tracking the market, as passive investing is otherwise known, is a style of investment management in which a fund’s performance aims to mirror a market index. It works in conjunction with Modern Portfolio Theory and the Efficient Market Hypothesis, which sees individual stock-picking and tactical asset allocation as futile. Efficient Market Hypothesis states that current prices incorporate all available information and expectations. ‘Mis-pricings’ can occur but not in a predictable pattern that can lead to consistent out-performance.

So instead, we concentrate on strategic asset allocation to arrive at the right level of risk for our clients. These funds tend to have lower charges than active portfolios since they simply replicate the index, and the risk of significant under-performance should be limited.

4. Timing the market

Ask five different economists what they think is going to happen to the markets in the next year and they will give you five different answers, because, who knows? None of them have a crystal ball, so cannot see what will happen and as recent events have shown us, anything can happen.

If you try and time the market, you could miss out on the best days for investment. We therefore advocate for ‘time in the market’ rather than ‘timing the market’.

Investment Portfolios

At Blueberry Financial we have seven investment portfolios for our clients that are made up of Dimensional and Vanguard funds. They range from Portfolio 1 which is low risk and is all invested in fixed interest and Portfolio 7 which is high risk and all in equities.

The dominant determinant of long-term, real-life financial outcomes is not investment performance. It is investors’ behaviour.

Nick Murray

Our investment partners

We use leading fund advisors Dimensional and fund managers Vanguard to help you achieve your investment goals.

Why Dimensional?

Dimensional Fund Advisors is a leading global investment firm. They have been translating great financial research and ideas into practical investment solutions for clients since 1981.

Rather than attempting to predict the future or outguess others, Dimensional draw information about expected returns from the market itself — leveraging the collective knowledge of its millions of buyers and sellers to set security prices. Trusting markets to do what they do best — drive information into prices — means they can spend time using their strong links with the academic community to interpret the research, design and manage portfolios, and serve clients.

They take a systematic, consistent approach to investing that investors can understand and stick with, even in challenging market times.

Rather than attempting to predict the future or outguess others, Dimensional draw information about expected returns from the market itself — leveraging the collective knowledge of its millions of buyers and sellers to set security prices. Trusting markets to do what they do best — drive information into prices — means they can spend time using their strong links with the academic community to interpret the research, design and manage portfolios, and serve clients.

They take a systematic, consistent approach to investing that investors can understand and stick with, even in challenging market times.

Why Vanguard?

Vanguard have been helping investors reach their goals since 1975. They specialise in index funds and have grown into one of the world’s largest fund managers.

Vanguard believes that the most successful investors are often those with the most discipline. Staying on top of what’s happening in the markets is great, but don’t let daily news chatter tempt you into tinkering with your portfolio unnecessarily. Investors who fall into this trap generate costs that they could easily avoid. What’s more, they often end up damaging the performance of their portfolio.

Vanguard believe it’s better to set an appropriate asset allocation to suit your goals, and then let time and the power of markets do the heavy lifting.

If you have any questions about our approach to investing and how we manage your money, please:


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