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
By Jack Forehand (@practicalquant) — Factor Investing has proven itself over long periods of time. But there is a price that has to be paid for its outperformance. The individual factors such as value, momentum and quality all can have extended periods where they underperform the market. One way to smooth out the returns from the individual factors is to use them together in a multi-factor portfolio. When constructed properly, multi-factor portfolios can produce comparable returns… Read More
By Jack Forehand (@practicalquant) — There is probably nothing that hurts our investment returns more than our behavior. We spend a lot of time debating things like whether we should invest in active or passive funds or whether value or momentum is a better investing factor, but in doing that we often lose sight of the thing that studies have shown detracts from our returns more than all of that. The way we are wired as… Read More
By Jack Forehand (@practicalquant) — This is the first interview in our new Five Questions series. Each month, we will take an in depth look at a specific issue in the market through a conversation with a leading expert in the area. The goal of this series is to move beyond the high-level discussion typically available in the media and to learn from someone who has studied the issue in depth. In our first interview, we… Read More