Factor investing, which revolves around an investment according to specific, pre-determined characteristics (“factors”), has piqued the interest of many in the investing world as investors hope they can finally beat the market on a consistent basis. According to MSCI.com, indexes can be constructed according to these six risk factors: Value, Low Size, Low Volatility, High Yield, Quality and Momentum. By doing so, factor investing combines simplicity, transparency, and the affordability of indexing with the irresistible prospect of “beating the market,” which explains its surge in popularity over recent years.
Interesting study from Wealthfront, noting that only 8% of linked accounts in 2015 were built properly. Most suffered from excessive fees, insufficient diversification, and heightened risk. Continue reading “Portfolio Problems Abound”
It’s a fact that the markets will fluctuate, meaning that there may be periods where your account will underperform. Nonetheless, as difficult as it is, it’s important to keep a long-term perspective and stick to a properly positioned, balanced portfolio. A significant part of this process is Continue reading “Give Diversification a Chance!”