You should plan to stick with your bet for decades or even for life, otherwise you could “permanently lock in” the underperformance when you sell: Especially if they can be obtained with low expense ratios, they could supplement a broad-based core index portfolio"."And if you do want to add additional risk factors in the pursuit of extra return, I recommend a low-expense multifactor offering rather than a fund concentrating on one risk factor."Ģ. Burton Malkiel’s 2020 edition of “ A Random Walk Down Wall Street:” “ Smart beta investing with single-factor products has not turned out to be smart investing".however "Multifactor "smart beta" funds appear to have produced better results by taking advantage of the low or negative correlations between the factors. Wow, this thread really took off and I truly benefited from all of the discussion! If I were to “conclude” anything from it, here are my main “bottom line” takeaways:įrom Dr. Your answers can be brief.Ĭan you share one or two “A-Ha” moments you had that confirmed your beliefs for using factor investing? Also, how did you decide which factors to use? (small, value, momentum, etc.)Ĭan you share one or two “A-Ha” moments you had that confirmed your beliefs that factor investing is not necessary? I would like to explore both sides of the aisle, but on a more “personal“ level than many topics before this.
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