4 Key Factors That Impact Risk & Return

In my last post, we explored the nuances of diversifying your portfolio. In this video, we’ll explore why you should be compensated differently for investing in different types of asset classes. We’ll also explain why the true evidence-based investing our firm advocates is more powerful than mere surveys, studies and research reports so often touted by the media and the financial services industry.

We’ll explore why stocks historically return more than bonds, why small-cap stocks return more than large-company stocks and why “value stocks” generally return more than growth stocks. We’ll also explore two new factors that most investors don’t know about (profitability and momentum).  Finally, we’ll explain why longer-term bonds can be expected to return more than shorter-term bonds and how lower-grade bonds should be expected to return more to investors than their higher-grade counterparts.

a

  • Insight #7: Basis of Market Returns
  • Insight #8: The Essence of Evidence Based Investing
  • Insight #9: Factors that Figure in Your Evidence-Based Portfolio
  • Insight #10: What Has Evidence Based Investing Done for Me Lately?

In my next post, we’ll look at the human factors that influence investment decisions for better or worse.

 

Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen or experience.  Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal.  This communication may include opinions and forward-looking statements.  All statements other than statements of historical fact are opinions and/or forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”).  Although we believe that the beliefs and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such beliefs and expectations will prove to be correct.  Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.  Historical performance is not indicative of any specific investment or future results.  Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss of income and/or principal to the investor.  Investment process, strategies, philosophies, allocations and other parameters are current as of the date indicated and are subject to change without prior notice.  Nothing in this communication is intended to be or should be construed as individualized investment advice.  All content is of a general nature and solely for educational, informational and illustrative purposes.  Any references to outside content are listed for informational purposes only and have not been verified for accuracy by the Adviser.  Adviser does not endorse the statements, services or performance of any third-party author or vendor cited.  Unless stated otherwise, any mention of specific securities or investments is for hypothetical and illustrative purposes only.  Adviser’s clients may or may not hold the securities discussed in their portfolios.  Adviser makes no representations that any of the securities discussed have been or will be profitable.

About Chas Boinske

Charles P. Boinske, CFA, is a 30 year investment management veteran overseeing the strategic direction and portfolio management process for Independence Advisors, LLC. Have a question for Charles? CLICK HERE TO ASK CHARLES

, , ,