How can you increase the odds of having a positive investing experience with minimal stress over market fluctuations? Turn to an evidence-based approach that’s backed by research.
Learn about evidence-based investing (EBI) in a way that best fits your own style. Our learning center offers videos, blogs, and an academic white paper. Dig into the evidence today!
EBI is a decision-making framework that makes it possible to evaluate the related topics confronting today’s investor and challenge the wisdom of conventional investment advice. EBI offers a way to navigate the investment landscape in a systematic, analytical, and scientific manner; all with the goal of maximizing risk-adjusted after-tax returns for investors. EBI guides investors to make decisions based on data, academic research, and defined process, rather than speculation, greed, and fear. EBI can generally be expressed in the following formula.
In each of the above ratios, your numerator should be higher than your denominator. Because we obviously can’t precisely quantify these metrics, think of it as more of a personal scorecard. If you assess yourself honestly and come up with an overall “EBI Score” of greater than five, you are well on your way to being a bonafide practitioner of Evidence-Based Investing.
EBI is critical to Savant’s investment philosophy because it removes emotion from the equation and focuses on an objective, data-driven solution. Without employing an EBI framework, investors can fall victim to their own emotional biases, we believe often to the detriment of their portfolio.
Capital markets are an ever-evolving ecosystem, which is driven in the short term by the herd mentality of its market participants. EBI allows investors to step away from the mob dictating asset price movements and focus on the bigger picture. By taking a 30,000-foot view of the market environment, we can objectively focus on the factors that are critical to the long-term investing journey that is investing.
Ensuring the credibility of sources is paramount to any research paper. Each source must be objective in approach and unbiased by outside motivations. Sources referenced throughout our EBI white paper come from reputable, industry-leading institutions and their research is based on empirical evidence.
More research content from Savant is available through the following links.
Evidenced-Based Investing Articles
Savant White Papers
Outside Resources
Evidence-based investing (EBI) is the framework we use at Savant to design and implement portfolios on behalf of our clients. As EBI continues to evolve, it is important to recognize that this framework is not a map telling you exactly where to go and what route to take. Instead, EBI serves as an internal compass of investing principles that are supported by data, theory, and common sense.
—Phil Huber, Chief Investment Officer of Savant