A recent article in Advisor Perspectives provides an overview of the performance of various factors in the first quarter of 2018. Noting several developments that led to increased market volatility…
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Common Mistakes in Factor Investing
…career, that investors using factor-based strategies tend to make. 1 – Thinking the Past Always Repeats Itself At its core, factor investing is about odds. If you look at factors…
How Long is Long Term in Investing?
…investors the definition of “long-term” becomes too narrow and time focused. When thinking about long term investing, timeframe is not the only factor you consider. Positive Probabilities With Time One…
Stocks Aren't Reflecting Improving Earnings
…practice of repressing financial volatility at the first sign of market instability,” and this leads to an increased risk factor for stocks. “I strongly suggest,” El-Erian concludes, “that all three…
Will Passive Investing Become an "Expensive Mistake?"
…levels of volatility that we saw in 2017.” He notes cyclical factors, a tighter labor market and monetary forces as contributing elements. McKlennan comments on China’s potential as a destabilizing…
The Devil is Often in the Details in Investing
…Number of Stocks: 336 40 784 Primary Factors Used: Price/Book, Price/Earnings, Price Sales Enterprise Value/EBITDA Multi-Factor, Not Disclosed If you were an investor looking for exposure to value and…
Is the Market Really Overpriced?
…prefers to use real earnings yield because, he says, “inflation is absolutely crucial for long-term investors. It’s the most important macro factor.” Based on the real earnings yield metric, says…
Industries Concentrate and Investors Profit
…the average age of companies in the S&P 500 was 60 years in the 1950s, but now is only 20 years. The Concentration Factor One quantitative method for determining if…
Value Returns Could Improve, But Nobody Can Predict When
…quantitative analyst at investment firm AJO. But Andrew Ang, head of factor-based strategies at BlackRock, argues that, on the whole, “there is little relationship between interest-rate movements and value premium,…
What Gambling and the Oakland A's Can Teach You about the Importance of Process
…to continue to work going forward is key. This is a big benefit of factor-based approaches over funds managed by people. Factor models that are followed rigorously guarantee what was…