04: Consistency of approach

All of these approaches have their merits, and the prevailing market conditions often play a major part in determining which ones are most successful in the short term, but a key point to watch out for when selecting a firm of investment managers is consistency of approach.

A firm with a sound and disciplined underlying investment philosophy is far less likely to make knee-jerk reactions in response to poor short-term performance.

A fund manager who focuses on value could, for example, be lagging behind the market if investors are piling into growth stocks at the peak of a bull market. But forcing the fund manager to change their approach could be disastrous if the market conditions change in favour of value investing shortly afterwards.Last Updated