A recent Forbes article offers a recap of an interview with Research Affiliates’ founder and CEO Rob Arnott, including his insights regarding the market and “smart beta” investing.

Here are some highlights:

Research Affiliates’ index investing strategy weights companies by the size of their businesses rather than market capitalization (share price). Arnott argues, “Why would you want to have a bigger investment in a company just because it got more expensive? That makes no sense.”

Arnott says the term “smart beta” has become popularized to the point where it now “means nothing.” The original definition of the term, he says, referred to “strategies that win because they rebalance or contra-trade against the irrationality that happens in the market.”

His firm, Arnott says, is also known for its work in “global tactical asset allocation,” another contrarian strategy. In general, he says, such strategies are tough, and work “because it’s painful, it’s uncomfortable, and because the markets don’t reward comfort.”

“It’s hard to step forward and say, ‘I want more of that,’ for an asset that’s inflicted pain and losses,” says Arnott. “So that’s the challenge with contrarian investing.”