Don’t put at risk what you need, to get what you don’t needWarren Buffett
Investment markets move in cycles. Park Street Group’s investment process has the objective of capturing the potential upside of growth assets (shares and property) in up-markets and the relative safety of defensive assets (cash, term deposits and bonds) in down markets.
Successful portfolio management requires following an evidence-based process. In our view, the key drivers of investment market cycles are valuation and investor sentiment.
Our philosophy and process draws upon the insights of three Economic Nobel Prize recipients:
- Professor Eugene Fama (markets are too un-predictable in the short term),
- Professor Robert Shiller (markets are quite predicable in the long term via valuation analysis), and
- Professor Daniel Kahneman (behavioural biases such as Loss Aversion and Recency Bias explain normal (albeit, at times not rational) short term investor behaviour).
From these insights, Park Street Group’s proprietary Valuation and Sentiment framework assesses opportunities and risks across markets. The outcomes of this analysis is communicated to clients via the Park Street Group Investment Matrix.