Your Guide to Successful Evidence-Driven Investing™

Evidence-Driven Investing™ is a smarter way to build and preserve your long-term wealth. This isn't about speculation and intuition — it's about leveraging the solid, undeniable power of empirical data and scientific research. 

By grounding our investment philosophy in documented historical market data, insights from behavioral finance, and thorough risk assessment, Cogent’s Evidence-Driven Investing™ crafts portfolios designed to produce strong returns and manage your risk more efficiently. It’s about making your investments work as hard as you do.

When markets are volatile, Cogent's Evidence-Driven Investing™ approach can assist in stabilizing and potentially increasing the value of your portfolio. This includes using long-term historical data vs. getting sidetracked by short-term, unpredictable market ups and downs. In other words, we stick with a disciplined investment strategy during the inevitable, bumpy times.

Focusing on long-term data rather than short-term market movements, we help you stay on your financial path during volatile periods. This approach involves a disciplined adherence to a pre-defined investment strategy designed to benefit from the market's natural ebb and flow without exposing you and your wealth to undue risk.

Cogent Strategic Wealth: Your Solution to Uncertainty

Another fundamental aspect of Evidence-Driven Investing™ is diversification. Spreading your investments across different asset classes, industries, and regions minimizes risks while opening up more investment opportunities. 

Think of it as not putting all your eggs in one basket. This approach isn't just a theory; it's backed by decades of financial research. It shows that a balanced portfolio is key to tapping into market gains while softening the blow from any investment that doesn't perform as well as expected. It's an innovative, disciplined investment process focused on pursuing long-term goals.

Following are a few examples of how diversification can be used in ways that benefit you.

Asset Class Diversification 

This strategy involves spreading investments across various asset classes, such as stocks, bonds, real estate, and alternatives. Investing in different asset classes can reduce the impact of poor performance in one class, reducing the risk of large losses.

Global Investing

Geographic Diversification involves investing in markets across different countries and regions to capitalize on global opportunities and reduce risks tied to any single economy. For instance, while U.S. markets might be experiencing a slowdown, other countries and companies could flourish.

Sector Diversification

This strategy diversifies investments across sectors and industries like technology, healthcare, and finance. Since sectors react differently to various economic conditions, this can help stabilize returns during various economic conditions.

Timelines 

Staying invested during market ups and downs is usually a winning strategy. That’s because down markets have been followed by rising markets, which usually go up more than they go down. If that weren’t true, no one would invest in the more volatile asset classes.

At Cogent, as you have probably surmised, we take a more disciplined approach to investing. We use a thorough screening process to identify investment opportunities aligned with our evidence-based criteria. This helps us pinpoint the best investment opportunities based on your needs and objectives. 

Our goal is to uncover value for our clients by building portfolios that are priced below their intrinsic value but with strong potential for appreciation.

A critical component of Evidence-Driven Investing™ is aligning your investments with your risk tolerance or capacity. Therefore, understanding your risk tolerance is crucial because it impacts all of our investment recommendations for your assets. 

This is typically assessed through questionnaires and interviews that gauge your financial situation, investment goals, and emotional capacity to handle market fluctuations. The outcome helps us build a portfolio aligned with your risk tolerance and goals.

We determine what is more important. How much you could make in rising markets versus how much you could lose in falling markets. Most investors want both but are more risk-averse. 

At Cogent, we analyze the information we collect to understand your comfort level with various risk scenarios. This understanding allows us to tailor portfolios that aim for optimal returns based on your risk profile, ensuring a more comfortable investment strategy.

Following are just a few of the ways that Evidence-Driven Investing™ can help you determine your risk tolerance: 

1. Ability
2. Willingness
3. Need

When designing an investment plan and deciding on the appropriate asset allocation, you should make sure to consider your unique ability, willingness, and need to take risks. The latter two considerations are fairly straightforward. The more “stomach acid” you can absorb during bear markets without abandoning your plan, the higher your allocation to stocks can be. And the higher the rate of return you need to meet your financial goals (and the more you convert desires into needs), the higher your allocation to stocks must be.

When thinking about their ability to take risk, most investors focus on their investment horizon—the longer the horizon, the greater the ability to take risk and the higher allocation can be to riskier stocks. 

A well-built financial plan can give great insight into focuses on achieving specific life objectives through various financial strategies and disciplines. It involves identifying and prioritizing distinct life goals – like buying a second home, funding education for children, or planning for retirement years that could last as long as working years.

Comprehensive financial planning frequently includes setting measurable time frames and target amounts for each goal, and it might involve more detailed, goal-specific strategies compared to broader financial planning topics.

Cogent’s Evidence-Driven Investing™ goes beyond traditional investment analysis by focusing on the power of human capital. We believe that a company’s workforce is a critical determinant of its long-term success. By quantifying the value of human capital, we identify investment opportunities that align with this essential factor.

Your ability to earn income, or human capital, significantly influences your investment risk tolerance. Cogent's proprietary methodology assesses your individual human capital risk profile to create a personalized investment strategy that balances your financial goals with your ability to withstand market fluctuations.

Our data-driven approach identifies companies with exceptional human capital management practices. By investing in these companies, you can benefit from their strong workforce and potentially outperform the market.

Let Cogent help you unlock the potential of human capital and build a portfolio designed to thrive.