Investment philosophy must include the main rules of the investment management process. It is a type of approach in which investor is tend to believe. Many investors believe in different things and have different approaches. For example, some of them believe only in fundamental analysis and valuation of investments. Other investors believe in technical analysis or are social-sensitive events oriented.
Investment philosophy is similar to investment strategy or to investment guidelines, however, is not so deep and only reflects the main values of the investor. Normal investment strategy should include complete possible actions during all cycles of the market while investment philosophy only reflects the way of investor’s thinking and main values. Also investment strategy should include exact investment techniques and investment tactics while investment philosophy can be very shallow.
It does not necessary mean that investor has his own investment philosophy because of higher return expectations. It simply may mean that investor likes this way of investing because some personal believes, and according to this attitude investment philosophy is similar to investment policy only is not so strict but is not related to some secret investment formula.
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