Dow vs S&P 500 total return, 1950-2018

How to Beat the Market, Factor 3b: Avoid the Biggest Companies, Remember Dow vs S&P

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“Buy a low cost, passive index fund, and hold it for the long term” is probably one of the most mainstream pieces of investment advice circulating over the past 40 years.  While I agree this is a better solution for most busy investors than the high overhead, high fee, and high turnover investment products that […]

US Large Growth vs Small Cap Value, 1980-2018, by Russell Indexes

How to Beat the Market, Factor 3: Buy Small Cap Value, Not the Big “Glamour” Stocks

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For the third factor in this series, I wanted to highlight two of the most “classical” factors for classifying and selecting stocks: size (large vs small) and cheapness (growth vs value).  These factors were perhaps most famously identified by academics Eugene Fama and Kenneth French, and popularised in the 3×3 grid used by Morningstar to […]

S&P 500 Buyback Yield Achievers beat the market

How to Beat the Market, Factor 2: Buyback Yield and Total Shareholder Return

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Buyback yield is one of the top factors I look for in stocks of companies I buy.  Buyback yield can be thought of one of at least four components of total shareholder return, the others being book value growth, debt reduction / deleveraging yield (familiar to anyone who has paid down principal on a mortgage), […]

NFO and Nasdaq Insider Sentiment Index beat the S&P 500

How to Beat the Market, Factor 1: Following Insider Buying

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It goes without saying that listed company insiders know more about what is going on within a company and what its near-term earnings results are likely to be than even most professional outside analysts, which is why insider trading is heavily regulated in many jurisdictions.  Most regulations don’t outright forbid insiders from trading their company’s […]

Hong Kong Small Caps broadly underperform the Hang Seng Index, 2000-2018

In Hong Kong, Small Caps Broadly Underperformed Large Caps 2000-2018

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Hong Kong small caps are of particular interest to me because I live and work in Hong Kong as a professional investor of retirement portfolios, and am always looking to put together higher quality and better valued portfolios than those available from broad market cap weighted index funds and ETFs.  A “small cap” company is […]

Vanguard Stock Mutual Funds PB vs ROE ratios March 2018

Top Vanguard Mutual Funds for Enhanced Asset Allocation

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Vanguard is synonymous with low-cost, passive investing.  Here I present some charts showing some metrics that can be used to enhance an asset allocation of the top Vanguard mutual funds even among these broadly diversified, passive funds. Despite my disagreements with him, Jack Bogle remains one of the foundational figures of today’s investing world I […]

Performance of Quality, Value, Momentum, and Low Volatility Strategies vs the S&P 500

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I have been working with “smart beta” strategies since 2006 (before they were even called “smart beta”), and continue to believe that investing through these rules-based factors provides better risk-adjusted returns than index funds at far lower cost than actively managed mutual funds.  In GFM-managed client accounts, we continue to apply the well-researched factors, of […]