The Factor-Based Investing Channel

Southeastern Assert Management: “We welcome unpredictability”

Ross Glotzbach is head of research and a principal at Southeastern Asset Management, one of the most respected value managers. In this interview, he discusses his investment outlook in an era of political and economic uncertainty.

Cash-Out Refinancing During Bubble Years Will Lead to Disaster

Nearly all analysts who write about the housing bubble have focused on the purchasing madness that occurred. While this is important, it overlooks the refinancing insanity of 2004-2007. This refinancing lunacy will devastate mortgage and housing markets for years to come.

Tax Reform: The Good, the Bad, and the Really Ugly—Part Three

Today we come to part 3 of my tax reform series. So far, we’ve introduced the challenge and begun to describe the main proposed GOP solution. Today we’ll look at the new and widely misunderstood “border adjustment” idea and talk about both its good and bad points

S&P 500 Snapshot: Yet Another Record Close

On Friday, the S&P opened lower than Thursdays' close and was fairly flat until late in the day with a rise a couple of hours before close. The index reached its intraday high at close and ended the day with a gain of 0.17%. Week over week, the index saw a gain of 1.51% ending Friday with another record close.

ECRI Weekly Leading Index: Down Slightly from Last Week

Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 144.5, down 1.0 from the previous week. It is currently just below its all-time high. Year-over-year the four-week moving average of the indicator is now at 12.17%, up from 11.88% the previous week, and at an interim high. The WLI Growth indicator is now at 11.1, down slightly from the previous week.

Companies with the Lowest Dividend Yields Are Driving Performance

In the month of January, the most important factor correlation to performance of developed market stocks has been dividend yield (DY).

Forecasting Factor and Smart Beta Returns (Hint: History Is Worse than Useless)

In a series of articles we published in 2016, we show that relative valuations predict subsequent returns for both factors and smart beta strategies in exactly the same way price matters in stock selection and asset allocation.

2017: A Challenging Year Ahead for Portfolio Allocation Decisions

Surprising many investors and pundits alike, the S&P 500 posted a solid return for 2016, finishing the year up close to 10%. If investors never looked at their statements, one might be naïve to how much markets zigged and zagged throughout the year.

The Best Equity Performance May Surprise You

Since 1995 mid-cap stocks have outperformed large- and small-cap stocks. Investors that are under-allocated to the mid cap asset class are potentially accepting greater risk AND missing out on available return. Mid-cap companies often exhibit the nimbleness and growth potential of small caps with the stability of large caps while accepting, but potentially, reducing the risks of both.

What's in Your ETF Portfolio?

ETFs continue to play a highly disruptive role in money management. RBA has embraced this trend by employing what we refer to as Pactive™ Management, which is the active allocation, whether strategic or tactical, of passive investment instruments such as ETFs, stock baskets, and index funds. These Pactive™ portfolios have quickly become the fastest growing part of our business.

The Myth Of The “Passive Indexing” Revolution

There is little argument that Exchange Traded Funds, more commonly referred to as “ETF’s” have and will continue to change the landscape of investing.

An Economic Look at Deregulation

Once entrenched, bureaucracies can be difficult to unearth. In rare instances where restrictions have been relaxed, others have arisen to take their place.

Investors Brace for a Storm of Uncertainty with Gold

Back in November, I wrote that domestic carriers are likely to see the new president—himself the former owner of the now-defunct Trump Airlines—as a strong partner in several key areas. Although a couple of airline CEOs have recently expressed strong opposition to some of Trump’s protectionist immigration policies, yesterday’s meeting appeared to be constructive, with the president telling the group he would soon be announcing something “phenomenal in terms of tax and developing our aviation infrastructure.”

6 Industry Groups that Appear to be Short-Term Overbought

Out of 24 developed market industry group, six currently look overbought in the short-term. Two come from the financial sector, two come from the technology sector, one from consumer staples sector (surprisingly) and one from the materials sector.

Monthly Market Risk Update: February 2017

Just as I do with the economy, I review the market each month for warning signs of trouble in the near future. Although valuations are now high—a noted risk factor in past bear markets—markets can stay expensive (or get much more expensive) for years and years, which doesn’t give us much to go on timing-wise.