Managing investment risk is important at every stage of life.
But especially so in retirement.
You want to enjoy your wealth now…
But one of the biggest risks of all is running out of money.
I’ve talked about them a lot recently.
They’re virtually unknown.
But likely represent a golden opportunity for any investor.
So, what’s the big deal?
Investors in traditional index funds are buying the entire market.
Capturing its returns.
But data shows that investors who expose their portfolio to specific factors can (and do) beat the market over the long term.
Enter factor-based investing.
Indexing is the most thoroughly researched, best-supported method yet devised for ensuring good investing results over the long term.
The investing industry often talks about alpha.
In simple terms, alpha is a measure of outperformance compared to the market.
The evidence shows that fund managers are finding it increasingly difficult to generate alpha.
According to a book called "The Incredible Shrinking Alpha", there are 4 reasons..
Technology and investing have many parallels.
Both constantly improve.
Both evolve over time.
Newer versions constantly replace what was once seen as the best.
And both are passions of mine.
Some have even described one particular type of fund as having a ‘cult-like status’.
Fans of Apple can certainly relate to this.
There are many behavioural biases to overcome when investing.
One of the most common that investors are prone to?
Last week one blog I published caused a flurry of questions to my inbox.
It caused confusion.
And a little anger.
The greatest reaction stemmed from one sentence:
“My own money is in firms such as DFA moving forwards.”