Five More Questions: Factor Investing with Jim O’Shaughnessy

By Jack Forehand, CFA (@practicalquant) This is Part II of my interview with Jim O’Shaughnessy. If you missed Part I, you can find it here. In part II, we talk about trend following, the future for simple value investing, and we take in in depth look at some of the arguments others have made in favor of the death of value investing. Just a note before we begin. This interview was transcribed from a phone… Read More

Five Questions: Factor Investing with Jim O’Shaughnessy

By Jack Forehand (@practicalquant) Factor investing has grown dramatically in recent years. But it is far from new. As those of us who invest using factors seek to learn more about them and the best way to utilize them in our portfolios, there is no better place to turn than those who have been there since the beginning. For this week’s interview, I have the privilege of talking to Jim O’Shaughnessy. Jim was a factor… Read More

Five Questions: The Importance of Narratives with Ben Hunt

By Jack Forehand (@practicalquant) One of the most important things any investor can do is to challenge their own beliefs. Confirmation bias leads all of us to seek out opinions that agree with us and then use them to confirm what we already think to be true.  That can be very dangerous, though, because you can end up missing obvious truths that are right in front of your eyes. Those who read my articles will… Read More

Five Questions: An Academic Look at Factors with Lu Zhang

By Jack Forehand (@practicalquant) — One of the major challenges that the finance community has faced over the years is how to explain what drives stock returns over time. If the market is efficient, then the only way to generate excess returns is to take more risk. But risk only makes sense to take if you get compensated for it. Determining which risks receive that compensation has been the subject of significant research in the… Read More

Five Questions: A Wealth Manager’s View of Factors with Michael Batnick

By Jack Forehand (@practicalquant) — Factor Investing poses some interesting challenges for wealth managers. On one hand, the evidence is very strong that investing using factors produces superior to returns to market cap weighted indexes over the long-term. On the other, factor strategies introduce another set of behavioral problems for clients because the extended periods of underperformance that are common in factor investing can lead to bad decision making and underperformance relative to index funds… Read More

Five Questions: An Inside Look at ETFs with Chris Hempstead

By Jack Forehand (@practicalquant) — ETFs are both the present and the future of asset management. The combination of lower fees relative to mutual funds, tax efficiency, transparency, and intraday liquidity that they offer has led to rapid growth in the space. Although ETF assets still pale in comparison to mutual funds, it is hard to argue that they aren’t on their way to surpassing fund assets in the future. Despite the popularity of ETFs,… Read More

Five Questions: An Advisor’s View of Cryptocurrencies with Tyrone Ross

By Jack Forehand (@practicalquant) — There may not be a more polarizing topic in investing right now than cryptocurrencies. On one side, believers in the technology think it will change the world and will generate massive investment returns for those who invest in it. On the other, many believe that even after the recent significant declines, any money invested in the space is bound to be lost. Because of the strong opinions that exist on… Read More

Five Questions: Machine Learning in Investing with Kevin Zatloukal

By Jack Forehand (@practicalquant) — Artificial intelligence and machine learning are going to change investing in many ways. The ability of computers to think, analyze data, and react more and more like human beings has the potential to change everything from how advisors interact with their clients to how investment strategies are created to the fees that are charged for investment advisory services. While very few people dispute the potential for these technologies in investing,… Read More

Five Questions: Modern Monetary Theory with Cullen Roche

By Jack Forehand (@practicalquant) —   It has been a long time since inflation was a major issue in the US economy. Unless you have been investing forty years, you have likely never experienced a situation where inflation was a significant concern for your portfolio. But with the federal deficit rising and US government debt at historically high levels relative to GDP, many investors worry that the days of benign inflation and low interest rates are coming… Read More

Five Questions: Private Equity in Public Markets with Brian Chingono

By Jack Forehand (@practicalquant) —   There are many misconceptions about private equity investing. Many investors view it as a domain where the rich and institutions earn outsized returns that are not available to the average person. It is viewed as an exclusive club with huge benefits that only the elite can be part of. But at its core, private equity is just investing in companies much like public investing is. It is a bet on the… Read More