WHAT DOESN’T WORK

Qualitative Stock Picking and Market Timing

Active Management

Stock market timing, stock selection, etc. proves to be a money losing proposition over time.

Market Timing


It is best to understand that as market participants, we have NO idea where the market is headed in the short term. There are indicators for subsequent market returns but unfortunately, these returns are realized over the period of years. Looking at the market in shorter time frames is most often counter productive.

Manager Selection

Do you ever think that you can pick a really good manager ahead of time? (it is easy to pick one after the fact). It turns out that ‘ex post’ (past) returns have very little predictive power for ‘ex ante’ (expected) returns. 99% of the investing public fails to appreciate this point.

Hedge Fund Performance

Do you think that investing in a hedge fund with make you rich? More than likely the only person who will get rich is the hedge fund manager.

WHAT DOES WORK

Enhanced-Indexing via Factor-Model Analysis

Factor-Based Investing

Value Factor

Momentum Factor

Size Factor

Short-Term Reversal Factor