Win at investing.
There are essentially two different types of evidence-based investing. The first is what I would call the traditional approach and involves tracking entire markets using market-cap-weighted index funds.
The second sort entails capturing the different risk factors that are known to drive investment returns — factors such as size, value, profitability and momentum. Some people refer to this is smart beta, though I personally prefer the term alternative beta.
So, which is best? Well, there’s no right or wrong answer. Investing is a personal matter — all investors are different — and which one is right for you will depend, for example, on your goals, your timeframe, your capacity for risk and your tolerance of volatility.
Perhaps the best approach for most people is a combination of the two — in other words a portfolio that’s built on cap-weighted index funds but which also tilts, to some degree or other, to different risk factors.
The seventh part of this video series explains your options in more detail.
How to Win the Loser’s Game was commissioned by Barnett Ravenscroft Wealth Management and is hosted on Sensible Investing TV.
ROBIN POWELL is a freelance journalist and the founding editor of The Evidence-Based Investor. Based in Birmingham, England, he founded Ember Television and Regis Media, and he specialties in helping disruptive financial firms to grow. He also campaigns for a fair, transparent and sustainable investing industry. You can follow him on Twitter at @RobinJPowell.
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Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
