Introduction Course

///Introduction Course

An Introduction to Investing and How to Use Our Site

By | 2018-06-19T08:12:47+00:00 January 3rd, 2015|Research Insights, Key Research, Investor Education, Introduction Course, Business Updates|

What We Do? We are a research-intensive asset management firm with a focus on high-conviction value and momentum factor exposures.[ref]More broadly, we seek to deliver Affordable Alpha.[/ref] Here is a complete list of our systematic investment strategies. [...]

The Quantitative Value Investing Philosophy

By | 2018-06-05T08:53:32+00:00 October 7th, 2014|Research Insights, Key Research, Value Investing Research, Introduction Course|

Benjamin Graham, who first established the idea of purchasing stocks at a discount to their intrinsic value more than 80 years ago, is known today as the father of value investing. Since Graham’s time, academic research has shown that low price to fundamentals stocks have historically outperformed the market. In the investing world, Graham’s most famous student, Warren Buffett, has inspired legions of investors to adopt the value philosophy. Despite the widespread knowledge that value investing generates higher returns over the long-haul, value-based strategies continue to outperform the market. How is this possible? The answer relates to a fundamental truth: human beings behave irrationally. We are influenced by an evolutionary history that preserved traits fitted for keeping us alive in the jungle, not for optimizing our portfolio decision-making ability. While we will never eliminate our subconscious biases, we can minimize their effects by employing quantitative tools.

The Robust Asset Allocation (RAA) Index

By | 2018-06-05T11:54:05+00:00 December 2nd, 2014|Research Insights, Key Research, Introduction Course, Tactical Asset Allocation Research|

Robust asset allocation solutions should be relatively simple, minimize complexity, and be robust across different market regimes. Simultaneous to these requirements, the solution must be affordable, liquid, simple, tax-efficient, and transparent, otherwise, many of the benefits of the solution will flow to the croupiers and Uncle Sam. We recommend that investors explore our robust asset allocation framework and go for the do-it-yourself solution. You'll be paying yourself 1%+ a year via saved RIA fees. Is this the only solution? No. But any solution must be robust, simple, tax-manageable, and low-cost. This is our best effort to develop a simple model. Developing a complicated model is easy; simple is difficult.

How to Use Active Funds in a Diversified Portfolio

By | 2017-08-18T17:03:16+00:00 September 30th, 2015|Key Research, Investor Education, Introduction Course, Tactical Asset Allocation Research|

Active management has been out of favor for a while--high fees, high tax burdens, and poor long-term performance. But with the slow rise of actively managed ETFs, which have lower costs and more tax efficiency [...]

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Where to Find Cool Academic Finance Research

By | 2018-03-12T08:43:29+00:00 April 1st, 2015|Introduction Course|

Over the past 10+ years I've cultivated a laundry list of websites associated with financial economics. My primary focus has been identifying sources for new ideas that are creative, unique, and have application in the real-world. Interestingly [...]

How to use the Fama French Model

By | 2017-11-09T11:05:36+00:00 August 1st, 2011|Research Insights, Value Investing Research, Investor Education, Introduction Course|

The CAPM is prolific, but doesn't appear to work! (Note: see here for our epic post on the history of factor investing.) For example, in the figures below I've plotted the Fama-French 25 (portfolios ranked [...]

Basic Factor Analysis: Simple Tools to Understand What Drives Performance

By | 2017-08-18T17:09:45+00:00 May 28th, 2015|Research Insights, Investor Education, Introduction Course, $SPY|

Investors should know what they are buying and why they are buying it. Unfortunately, more often than not, investment products are jammed down the throats of unsuspecting victims who are either ignorant, easy to influence, [...]

How to Calculate Volatility in Excel

By | 2017-08-18T17:03:26+00:00 December 19th, 2014|Investor Education, Introduction Course, Low Volatility Investing|

Wild-swinging oil prices have caused some chaos, or "volatility," in the financial markets recently. We've also heard a lot in the financial media regarding the strong performance of "low volatility" funds. But what exactly is [...]

Introduction to Finance: Class 6

By | 2017-08-18T17:01:48+00:00 August 6th, 2014|Investor Education, Introduction Course|

  Introduction to Finance: Class 6 Making Capital Investment Decisions Where to begin? Capital investment decisions also can be called ‘capital budgeting’ in financial terms. Capital investment decisions aim includes allotting the capital investment funds of the [...]

Introduction to Finance: Class 7

By | 2017-08-18T17:01:48+00:00 August 12th, 2014|Investor Education, Introduction Course|

Introduction to Finance: Class 7 Lessons from Capital Market History What is a capital market? Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors, and users of capital [...]

Our summertime introductory finance education course

By | 2017-08-18T16:59:36+00:00 May 2nd, 2016|Investor Education, Introduction Course|

Well, it's my birthday today, so I'm getting older, but I'm in high spirits because younger people are so excited to learn new things. Over the past week, a few younger blog readers (and even some [...]

Trend-Following with Valeriy Zakamulin: Moving Average Basics (Part 1)

By | 2017-08-18T16:54:22+00:00 July 14th, 2017|Trend Following, Trend-Following Course, Guest Posts, Investor Education, Introduction Course|

One of the basic principles of technical analysis is that ``prices move in trends". Traders firmly believe that these trends can be identified in a timely manner and used to generate profits and limit losses. Consequently, trend following is the most widespread market timing strategy; it tries to jump on a trend and ride it. Specifically, when stock prices are trending upward (downward), it's time to buy (sell) the stock. Even though trend following is very simple in concept, its practical realization is complicated. One of the major difficulties is that stock prices fluctuate wildly due to imbalances between supply and demand and due to constant arrival of new information about company fundamentals. These up-and-down fluctuations make it hard to identify turning points in a trend. Moving averages are used to ``smooth" the stock price in order to highlight the underlying trend.

Trend-Following with Valeriy Zakamulin: Types of Moving Averages (Part 2)

By | 2017-08-18T16:54:20+00:00 July 21st, 2017|Trend Following, Trend-Following Course, Guest Posts, Investor Education, Introduction Course|

In this post we aim to give an overview of some specific types of moving averages. Specifically, we cover "ordinary" moving averages and mention some examples of exotic moving averages.

TREND-FOLLOWING WITH VALERIY ZAKAMULIN: TECHNICAL TRADING RULES (PART 3)

By | 2017-08-18T16:54:21+00:00 August 11th, 2017|Trend-Following Course, Introduction Course|

A trend following strategy is based on switching between a financial asset and cash depending on whether the asset prices trend upward or downward. Specifically, when the strategy identifies that prices trend upward (downward), it [...]