Vanguard index funds have revolutionised investing. But if you’ve already got your head around index investing - you’re going to love this…

Factor investing is a strategy designed to systematically provide higher risk-adjusted returns than the market. But… it’s complicated and you’re going to have to take some pain to get there.

I expect this video will raise more questions than it answers. You should spend a lot more time researching factors before you decide to jump in.

Factor investing is a very technical “nerdy” approach to investing that requires you to get cosy with the empirical evidence. If this is the start of your factor investing journey then good luck! The rabbit hole goes deep. I’ve provided a list of sources and further reading material to get you on your way:

Further reading & sources from the video:

Rational Reminder Podcast - What are Factors
   • Using Factors to Spot Trends and Guid...  

Monevator - Intro to factor investing
https://monevator.com/how-big-are-the...

Ben Felix - Small Cap & Value
   • Small Cap and Value Stocks  

Ben Felix - Factor Investing with ETFs
   • Five Factor Investing with ETFs  

Monevator - The low Volatility premium
https://monevator.com/low-volatility-...

Rational Reminder Podcast - From Index Investing to Factor Investing at Vanguard
   • RR #173 - Antonio Picca: From Index I...  

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0:00 Intro
1:34 Capital Asset Pricing Model
4:46 Three-Factor Model
6:09 How high are we talking?
7:44 Factor Diversification
9:38 Underperformance
11:14 Should you be Factor Investing?

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