When Smart Beta Meets Machine Learning and Portfolio Optimization

Smart beta products using common factors like value, low volatility, quality, and small cap experienced an underwhelming performance from 2005–2022. On average, long-only factor portfolios built from a wider set of global factors identified in the finance literature generated significantly positive excess returns across countries, suggesting diversifying across many factors is more prudent than selecting a handful that have performed the best.

7 Predictions for a Stagflation Economy

Jason is making some predictions…and fully acknowledging that all of them could be wrong. There are only two sustainable options in investing: lose money fast, or compound returns slowly. Diversification remains the only free lunch in investing, and it has always been (and is likely to remain) the best way to successfully weather turbulent markets.

The People vs. Inflation: A Political Problem (Not an Economic One)

What will happen if our politicians pursue an economic “hard landing” that weakens employment for below-median households? What if Fed rate hikes crater consumption by further reducing their real income and wealth? If these things happen, we will achieve a Friedman-esque victory against inflation … but an ultimately empty victory for Main Street. At its heart, our current inflation is a political problem. It is going to require a political solution.