The Losing Battle to Consistently Beat the Market

By Jack Forehand (@practicalquant) —   It is commonly accepted the beating the stock market over the long-term is really difficult. Over the past 15 years, about 70% of large-cap managers have trailed the S&P 500 and about 80% of small-cap managers have trailed the Russell 2000. Investors in these funds have done significantly worse than that. The so-called behavior gap, which measures the difference between a fund’s performance and the performance of investors within the fund,… Read More

How an Investment Strategy Can Be at the Top and Bottom at the Same Time

By Justin J. Carbonneau (@jjcarbonneau) —  Imagine you’re presented with two investment models. Both hold a concentrated basket of 10 stocks, both are rebalanced monthly and both are built on factor-based investing methods. One of the strategies, let’s call is Model A, is up 58.1% for the year compared to a gain of 20% for the broader market. Ok, that 38% outperformance is pretty impressive. What about the other strategy, Model B, you ask? Well,… Read More