SAR believes that adaptive strategies based on continuous research and development are paramount for future investment success.
We believe Modern Portfolio Theory (MPT) is not wrong, it is mainly incomplete. Based on its development history, it has been designed with a limited – rational – conception of the human being, its behavior and decision making processes. Humans are not purely rational beings, they are rather emotional, which strongly influences their decision making. This presents a challenge to traditional – MPT based – finance theory and is a true paradigm shift.
The new world order in investing is a dynamic one. Markets and participants are driven by evolutionary forces such as competition, mutation, reproduction and natural selection. As a result markets are dynamic and context dependent. Convergence to an equilibrium is neither guaranteed nor predictable, behavioral biases abound.
This presents fertile ground for active and especially quantitative asset managers – SAR has developed its own proprietary Adaptive Asset Allocation (AAA) approach and is intensively working this ground to achieve the best results for its investors.