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
In a recent issue of the AAII Journal, author Michael Batnick highlights missteps made by investing legends as outlined in his book Big Mistakes: The Best Investors and Their Worst Investments (Bloomberg Press, 2018). Investors tend to expect the future to look like the recent past. “We believe that the object in motion will stay in motion,” Batnick writes. “Successful investing is about finding the balance between being prepared for the good times to last… Read More