Value investment strategies make investors wiser like water with core fundamental factor analysis.

Jacob Miramar

2018-04-17 12:38:00 Tue ET

Value investment strategies make investors wiser like water with core fundamental factor analysis. Value investors tend to buy stocks below their intrinsic book values and then wait for them to rebound to fair market values. This old-school investment philosophy echoes the *buy-low-sell-high* mantra of dynamic asset management. Nonetheless, the Russell 1000 Value index now trails the Russell Growth index by 130% in the 9.5-year bull market from late-2008 to mid-2018. Also, the former lags the S%P 500 market benchmark by more than 50%. Stock market valuation blows most conventional benchmarks, and the recent mega-cap tech juggernauts drive most of this outperformance. These tech titans include Facebook, Apple, Microsoft, Google, Amazon, Netflix, and Twitter (FAMGANT).

Some recent quantitative value investment strategies have quietly transformed into smart-beta factor strategies. The latter entail attributing the broad variation in total returns to several fundamental factors such as size, value, momentum, profitability, asset growth, and market risk exposure.

Subtracting multi-beta risk premiums from total returns yields alpha estimates or average excess returns after the econometrician controls for multiple fundamental factors in the smart-beta value investment strategies. On this basis of fundamental risk adjustment, value stocks earn higher *alphas* or average excess returns than their glamor counterparts.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

All of the 18 systemically important banks pass the annual Federal Reserve stress tests.

James Campbell

2019-07-30 15:33:00 Tuesday ET

All of the 18 systemically important banks pass the annual Federal Reserve stress tests.

All of the 18 systemically important banks pass the annual Federal Reserve stress tests. Many of the largest lenders announce higher cash payouts to shareho

+See More

AYA fintech finbuzz illustrative video tutorials on YouTube

Amy Hamilton

2019-05-05 10:46:10 Sunday ET

AYA fintech finbuzz illustrative video tutorials on YouTube

This video collection shows the major features of our AYA fintech network platform for stock market investors: (1) AYA stock market content curation;&nbs

+See More

President Trump remains optimistic about the Sino-American trade war resolution.

Monica McNeil

2019-02-05 10:32:00 Tuesday ET

President Trump remains optimistic about the Sino-American trade war resolution.

President Trump remains optimistic about the Sino-American trade war resolution of both trade deficit eradication and tech transfer enforcement. Trump now s

+See More

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America.

Joseph Corr

2019-09-05 09:26:00 Thursday ET

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America.

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America. Firs

+See More

Artificial intelligence continues to push boundaries for tech titans to sustain their disruptive innovations and competitive advantages.

Chanel Holden

2020-11-01 11:21:00 Sunday ET

Artificial intelligence continues to push boundaries for tech titans to sustain their disruptive innovations and competitive advantages.

Artificial intelligence continues to push boundaries for several tech titans to sustain their central disruptive innovations, competitive moats, and first-m

+See More

Corporate ownership governance theory and practice

Monica McNeil

2022-04-25 10:34:00 Monday ET

Corporate ownership governance theory and practice

Corporate ownership governance theory and practice  The genesis of modern corporate governance and ownership studies traces back to the seminal work

+See More