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Investing - Theory, News & General • Swedroe article Morningstar

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I think he's right, that the pendulum will swing back. But it sure is taking its time.
Yep. Waiting in the pumpkin patch every Halloween night for years gets to be old and tiring. It has been a long wait, all the way back to the 2008-2009 Great Financial Crisis. You gotta believe.
An investor who retired at age 65 in 2009 would now be 80. That's a long wait indeed.
In a way, you’re actually making the point for factor based investing. The dominant factor in all our portfolios is market beta. Even my portfolio, heavily torqued to size and value and evenly split US/Int, has done well over that period because of the dominance of the market factor. As Larry has written many times, even a 60/40 portfolio has about 85% of its risk wrapped up in market beta. The point of factor based equity investing is to make risk exposures more equal. For most all of us that means moving away from market factor dominance. Even the most heavily tilted portfolio still has plenty of market beta in it.

Dave

Statistics: Posted by Random Walker — Sun Apr 28, 2024 8:11 pm — Replies 21 — Views 3185



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