в—‹ Thoughts on Factors (pros and cons) (4) в—‹ Implementation of a factor portfolio (4) Through this lens, the book narrows down on a short list of them and we are going to focus on:.в—‹ It has to be intuitive - it is logical, it has a risk-based explanation, and/or it has a behavioural definition в—‹ It has to be investible - it holds up not just on paper but it survives actual implementation issues such as trading costs Value premium exists regardless of whether you measure its definition by price-to-book, price to earnings, price to cash flow, or price to sales) в—‹ It has to be robust - it holds for various definitions (ie. в—‹ Has to be pervasive - holds across countries, regions, sectors, and asset classes в—‹ Has to be persistent - holds across long periods of time and different economic regimes For a factor to be considered, it must meet all of the following tests:

To determine which exhibits in the factor zoo are worthy of investment, we will use the following criteria.Rather than viewing a portfolio as a collection of asset classes, one can view it instead as a collection of diversifying factors. However, there is a non - traditional way to think about diversification.Solid historical wisdom has been to diversify across stocks and bonds all over the world for your portfolio.If you have questions or clarifications, please message me or send an email to Traditionally, most portfolios have been constructed primarily from public equities and bonds. Some of the research is a little wonky, so I have done my best to condense and simplfy wherever possible.

The design point of these episodes is to explain factors in 'Plain English'. 'Your Complete Guide to Factor Based Investing' Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today: Berkin, Andrew L, Swedroe, Larry E: 9780692783658: Books - Amazon.ca Most of the content for these episodes is inspired and heavily sourced from Larry Swedroe and Andrew Berkin's book: Asking questions like:ДЎ) What is the evidence that supports our decision making?ДЈ) Can we implement it in a way that fits my life and my goals?Д¤) Can I expect a relatively better ROI on this approach over decades, versus other alternatives?ДЎ) Introduce factor investing more in depthДў) Explain the main factors that drive investment returnsДЈ) Explain how factors can be implementedД¤) Offer some pros and cons and reasons why you may want to either pursue or avoid a factor investment strategy When I discovered factor investing in 2017, it made sense that investment decisions should be carried out the same way as big business decisions. These steps help them make good decisions. They look for research, they test solutions to make sure they are compatible with their environment, and they build business cases based on their findings. In the world of enterprise technology, businesses want proof that the solutions they are buying will perform as expected.

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