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Our Philosophy and Process

Since our founding in 1930, we've employed the same, time-tested investment philosophy. It has guided us through periods of market turbulence and enabled us to help our clients meet their long-term investment goals.

At Dodge & Cox, we believe successful value investing requires the conviction that comes from continual, deep fundamental research and the patience to invest for the long term. 


Our single, value-oriented investment philosophy

We manage investments by applying the same value-oriented investment philosophy across a focused set of strategies. 

We believe we can take advantage of price inefficiencies in the equity and fixed income markets to generate long-term outperformance. We do so by diligently researching and assessing an investment’s opportunities and risks, and having the discipline and patience to invest with a long time horizon.  

We’re highly selective in constructing portfolios and invest with a goal of producing attractive total returns across a range of economic and market scenarios.

Long-term investment horizon

Decades of investing have taught us that investor perceptions fluctuate much more widely than underlying fundamentals. That's why we believe it's impossible to consistently predict short-term price movements. Instead, we invest across a three- to five-year horizon, acting with an owner's mindset toward the companies and other issuers we hold in our portfolios. This enables us to stay focused on the factors that we believe ultimately determine success: franchise and financial strength, competitive positioning, growth opportunities, management quality, and valuation.

Deep fundamental research

Our team of Global Industry and Fixed Income analysts are the engine behind idea generation and risk analysis across our investment strategies. Our analysts cover the entire capital structure of companies globally, giving us the depth of understanding crucial for developing a well-informed investment opinion of both credit and equity investments. We apply a similar approach to evaluating fixed income investments such as structured products and government-related securities. We believe our approach serves as a key source of differentiation and value-add for our clients, enabling us to better understand an investment’s potential opportunities and risks.

Valuation discipline

A strong price discipline is an essential characteristic of our investment philosophy. When a company's or issuer's valuation reflects pessimism about its current challenges or overlooks its growth potential, we may see a long-term opportunity. Conversely, a great company may not be a great investment if its valuation is too high relative to its long-term profit outlook. Starting price and starting yield for fixed income are key components of future investment return. Given their importance to long-term results, we continuously evaluate current valuations in the context of long-term fundamentals.

Embedded risk management

We believe the primary risks investors face are the possibility of permanent loss of capital and erosion of future purchasing power. Evaluating these and other risks involves analyzing downside scenarios, and determining if we’re being adequately compensated for them over our investment horizon. By building our knowledge of each holding and analyzing overall portfolio risk exposures, we seek to manage risk effectively and help our clients achieve their long-term investment objectives.



Building investment conviction

Our approach to active management combines deep fundamental research with team-based decision making. We make every decision together with Committees designed to spur debate and leverage the experience and various perspectives of its members.

Analyst-driven research
  • Advocate investment ideas based on individual company research and starting valuation.
  • Develop long-term financial forecasts and analyze sources of downside protection and upside potential.
  • Conduct ongoing due diligence with management teams and industry experts to develop a 360° view of opportunities and risks.
Team-based review
  • Rigorously vet analyst recommendations.
  • Stress test assumptions and present devil’s advocacies.
  • Identify areas for additional research and due diligence.
  • Advise Investment Committees on intra-sector relative value.
  • Optimize portfolio positionings for unique mandates.
Collective judgment-based decisions
  • Construct a diversified portfolio on a bottom-up basis.
  • Approve new investments, complete sales, adds, and trims.
  • Monitor and evaluate portfolio holdings.
  • Manage portfolio-level risk with a focus on avoiding permanent loss of capital.


More about our time-tested approach

Over our more than 90-year history, we have continuously enhanced our approach as markets globalized and deepened. We devote all our energy to helping our clients achieve their long-term investment goals.

Our people

Meet the people who pursue investment excellence every day on behalf of our clients.

ESG integration

We consider financially material environmental, social, and governance (ESG) factors as part of our detailed, fundamental research process.