Portfolio diversification is a known strategy for minimizing risk, but these efforts can be thwarted if the diversified securities react in a similar way to market conditions. Factor investing is…
Search Results for: factor
Looking for Value in Un-Love Small Cap Stocks
…a study by a team at U.S. hedge fund AQR, the findings of which resurrected the idea of the small-cap premium by introducing the quality factor into the analysis. The…
Avoiding the Value Trap when Shopping for Payout
…factor for stock selection [must] be combined with other factors.” These other factors include payout ratios (percentage of earnings paid out as dividends) and dividend growth. Specifically, the team looks…
Machine vs. Man -- Algos the Winners Post Brexit
…category sometimes referred to as commodity trading advisors (CTAs) uses trading algorithms to identify market trends and place bets on futures and other derivatives. Most of these models didn’t factor…
The Fool’s Housel on Brexit: Hurry Up and Wait
…surprise, but we’re not worried.” He reminds readers of the fact that the U.S. stock market has increased by a factor of 10,000 over the last 140 years despite countless…
Jason Zweig on Why Interest Rates Matter
…Wall Street Journal article, Jason Zweig describes how interest rates are an important factor when determining the intrinsic value of investments (the current value of the cash they are likely…
Factor Investing is Gaining Appeal
…investors toward a different approach referred to as “factor investing”. The idea behind factor investing is to break down securities into the fundamental issues that drive their returns, a methodology…
Fundamentally Sound Stocks Win When Recessions Loom
…group invests using a number of ‘factors’ — that is, fundamental criteria that measure valuation, momentum, financial strength and other stock qualities.” Investing based on these factors tends to lead…
Greenblatt on Why Passive, not Active, is Best for Most Investors
…funds, however, is that the fund performance factor is removed from the equation. That is, because index funds track market benchmarks, dollars don’t move in and out due to underperformance…
Follow Buffett’s Lead and Focus on Value + Quality
…similar value and high quality exposure may look to low costs ETFs, says Kaissar. For instance, “investors can invest equal parts in the iShares MSCI USA Value Factor ETF and…