{"id":3114863,"date":"2020-09-27T06:30:06","date_gmt":"2020-09-27T06:30:06","guid":{"rendered":"https:\/\/stockviz.biz\/index.php\/2020\/09\/27\/factor-rotation\/"},"modified":"2021-09-14T12:45:10","modified_gmt":"2021-09-14T07:15:10","slug":"factor-rotation","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2020\/09\/27\/factor-rotation\/","title":{"rendered":"Factor Rotation"},"content":{"rendered":"\n

Is there a away to time factors?<\/h2>\n\n\n\n

Factor investing is the process of constructing portfolios of stocks by isolating certain statistical properties that have shown to out-perform over the long term. For example, investing in stocks that rank high in the \u201cQuality\u201d factor. Here are some factors that were discussed previously on FreeFloat:<\/p>\n\n\n\n

  1. Introduction<\/a> and Fama-French 5 Factors<\/a>.<\/p><\/li>

  2. Momentum investing<\/a>.<\/p><\/li>

  3. The Low-volatility Factor<\/a>.<\/p><\/li><\/ol>\n\n\n\n

    No Holy Grail<\/h2>\n\n\n\n

    While factor portfolios are expected to out-perform over the long-term (say, 30 years,) there is a strong chance that they under-perform over an individual\u2019s holding period (5-10 years.) This leads to sub-par investment returns due to out-of-favor factors.<\/p>\n\n\n\n

    For example, Value vs. Growth.<\/p>\n\n\n\n

    Is Value\/Growth Dead?<\/h3>\n\n\n\n

    Consider IWD<\/strong>, the iShares Russell 1000 Value ETF, IWF<\/strong>, the iShares Russell 1000 Growth ETF and IWB<\/strong>, iShares Russell 1000 ETF.<\/p>\n\n\n\n

    2000 through 2010<\/strong>, value out-performed.<\/p>\n\n\n

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    <\/a><\/p>\n