Featured and Latest Posts
Beyond the Three-Factor Model: RAFI, Profitability and the Evolution of Smart Beta
The Fama-French Three-Factor Model (1993) was a milestone in modern finance, offering a more complete explanation of asset returns by introducing size and value alongside market beta. Yet even this expanded framework struggled with persistent anomalies—such as the underperformance of value stocks as defined by the price-to-book ratio, and the puzzling momentum premium.
In this article, we examine how two complementary innovations—RAFI’s Fundamental Indexing and Robert Novy-Marx’s profitability factor—have sharpened the lens through which we view value investing. Each, in its own way, addresses the limitations of traditional value definitions and helps distinguish true bargains from value traps. We also explore the role of momentum in asset pricing and why Fama and French, despite acknowledging its power, ultimately excluded it from their Five-Factor Model (2015).
Together, these ideas illustrate that the future of value investing may lie not in abandoning it, but in redefining how we measure it.
Property or Investment Portfolio? A Deep Dive into UK Buy-to-Let vs Stocks and Bonds
‘If I won the lottery, I’d spend a bit and invest the rest in property.’ That was a friend of mine recently—and it’s a mindset shared by many in the UK. Property feels safe, tangible, and tried-and-true. But is it actually the best place for long-term wealth?
In this post, I break down the reality of buy-to-let investing: the true returns after costs, the friction involved, and how it stacks up against a globally diversified stock and bond portfolio. We crunch the numbers, compare outcomes for a £500,000 investment, and explore why property feels safer—even if it isn’t.
Whether you’re a seasoned landlord or simply wondering what to do with a hypothetical windfall, this deep dive might change how you see the choices.
Private Equity and Private Credit: The Private Markets Mirage?
Private equity and private credit have long promised higher returns, exclusivity, and access to opportunities beyond the public markets. But once fees, illiquidity, and access barriers are factored in, the reality is often far less compelling. Whilst gross returns may shine, net returns frequently disappoint. This post explores the data, challenges the hype, and asks whether recent policy moves—like the Mansion House reforms—risk putting pension savers on the hook for complex, costly strategies that may benefit fund managers more than investors.
Is Day Trading Stocks a Viable Strategy?
Day trading is often seen as a fast-paced path to financial freedom, but the reality is far more challenging—especially when factoring in trading costs. In the UK, the absence of a pattern day trader rule makes entry easier, yet most traders still lose money over time. Drawing on studies from the US, UK, and Taiwan, this post explores why only a small fraction of day traders manage to stay profitable after costs. Discover the skills, risks, and psychological resilience required to beat the odds, and why the allure of quick profits often masks a grueling reality.
Good financial decisions aren’t about predicting the future—they’re about following a sound process today.
In investing, outcomes are noisy. Short-term performance often reflects randomness, not skill. Yet fund managers continue to pitch five-year track records as if they prove anything. They don’t.
As Ken French puts it, a five-year chart ‘tells you nothing’. The real skill lies in filtering out the noise—evaluating strategy, incentives, costs, and behavioural fit.
Don’t chase what worked recently. Stick with what works reliably.