Why short term stock-picking is a gamble... And factor investing is a long-term strategy

A smarter approach to Wealth Management

At Clarion Wealth Planning, we take a different approach to building and preserving wealth. Our focus isn’t on quick wins or fleeting market trends—it’s about structuring financial plans that evolve with our clients, ensuring stability and growth through all stages of life. True financial planning isn’t just about making investments; it’s about making investment decisions that fit into a broader, carefully crafted vision.

One of the key strategies we use is factor investing. Unlike stock-picking trends or speculative plays, factor investing relies on decades of academic research and real-world application. It follows a disciplined, structured approach that targets characteristics proven to drive returns over the long term. This method ensures portfolios are positioned for sustainable growth while remaining resilient in unpredictable market conditions.

The problem with speculative investing

Many investors get caught up in the excitement of stock market speculation. They follow trends, chase the latest hot stocks, and hope for rapid gains. Sometimes it works, but often, these strategies lead to inconsistency, anxiety, and losses.

How factor investing works

Factor investing focuses on fundamental market drivers backed by extensive research. The core factors include:

Trust the efficiency of investment markets (although factor investing is not passive investing).
Selecting stocks that are priced attractively relative to their fundamentals.
Investing in smaller businesses with strong long-term potential.
Prioritising companies with robust profitability and financial health.

Why Clarion uses factor investing

At Clarion, we don’t chase hype or follow speculation. Our approach is based on data, structure, and a commitment to long-term financial success. We tailor each portfolio to align with our clients’ goals, balancing risk and return in a way that makes sense for their future.

Factor investing is a key part of our strategy, ensuring that investments are built on principles that go beyond short-term market fluctuations. This approach allows us to create resilient, adaptable portfolios that stand the test of time.

Staying the course: The key to long-term success

Markets move in cycles, but history shows that those who stick to a structured strategy achieve the best results. Success in investing doesn’t come from reacting to every market shift—it comes from maintaining a disciplined, well-thought-out approach.

At Clarion, we guide our clients through every phase of their financial journey, providing reassurance and clarity no matter what the markets are doing.

The stock market can be unpredictable, but financial success isn’t about luck—it’s about strategy. Factor investing provides a structured, research-backed method to grow and sustain wealth over time.

At Clarion Wealth Planning, we help our clients build resilient portfolios designed for lasting success. If you’re ready to take a structured, research-driven approach to investing, we’re here to help.

Adam Wareing – 14/03/2025