Jan 29, 2020
Today we have a solo episode, where Grant shares his thoughts on an array of investment products that have come to market over the last decade. Grant covers index funds, smart beta, factor investing, and shares his favorite investment strategies for 2020.
The product options investors have available to them have grown dramatically over the last decade. We now have thousands of mutual funds and exchange traded funds available at very little cost, and in today’s episode Grant discusses some of these newer investment options. Focusing on Smart Beta Funds, Grant explains how they can contribute to positive investment returns when deployed thoughtfully. And towards the end of the episode Grant shares a few of his favorite investment strategies for 2020.
[01:29] History of Index Investing – Grant briefly walks you through the early days of index investment and how the Capital Asset Pricing Model was developed.
[03:52] Alpha Versus Beta – Grant talks about the main differences between the two investment strategies.
[08:03] Which one performs better? – Grant explains how one of these strategies outperform the other in terms of producing consistently positive returns.
[11:46] Smart Beta Funds - Special features of Smart Beta Funds (Factor Funds) and why there’s been a lot of headlines about them.
[13:35] S&P 500 and Market Capitalization – Before getting deep into smart beta funds, Grant gives a brief explanation of how the market capitalization and S&P 500 index works.
[15:28] Value & Growth – Grant talks about how value and growth come into play in terms of categorizing stocks.
[20:08] How value stocks favor beta portfolios – Grant explains the reasons behind the recent popularity of smart beta funds and how it connects to the value and growth spectrum.
[25:32] Factors involved in Smart Beta Funds – Grant talks about what factors are considered to weight stocks when it comes to smart beta funds and what are the factors actually work.
[29:19] Current market trends – Grant’s tale on how the market behaved since the last financial crisis and what might happen in case of another recession or a massive market correction.
[34:45] Investment strategies for 2020 – Grant shares his top tips on what to consider when planning your investment strategy in the year 2020.
Resources:
Index fund basics: investor.gov
Smart Beta Funds: investor.gov
Capital Asset Pricing Model: psc.ky.gov
S&P 500 Index: investopedia.com
Market Capitalization: investopedia.com