Alpha Architect Research Blog

The Newest Alpha Architect Research and Insights


Active Managers Should Love Passive Investing–It Makes Them Better!

Photo courtesy of Wes. All complaints can be directed towards him.
In a recent letter to its investors, Crispin Odey commented as follows:(1) Money managers specializing in picking stocks and bonds are being driven out by mindless passive investing. Odey is a London based hedge fund manager, whose flagship ...

Active Versus Passive Investing: Can we End the Confusion?

active index and passive index
I've noticed something profound the past few years: depending on your audience, the definition of active investing and passive investing is different. To a financial journalist, active means "human stock-picker," and passive means "computer stock-picker." In addition, financial journalists often ...

Swedroe Spotlight: Explaining the Low Risk Effect

Larry Swedroe Insights with Alpha Architect
Before proceeding, it’s important to note that beta and volatility are related, though not the same. Beta depends on volatility and correlation to the market, whereas volatility is related to idiosyncratic risk (see here for an explanation of how to ...

President’s Day Factor Investing Geekout

The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index.
Our epic piece on factors from a few weeks ago is still ringing in our own ears: Are factors even real? Or just data-mining? The conclusion: who knows. We need more data. And more data we can find. To include ...

Will ETFs Destroy Factor Investing? Nope.

hml beta
One of the popular investing truisms is the following (inspired by Bill Sharpe): For somebody to beat the market (win) someone else has to lag the market (lose). This becomes an even more daunting (efficient market) statement when changed to ...

Tactical Asset Allocation Insights via the Geeks from Thinknewfound

corey image
How do we identify who is a flash in the pan blogger versus the next Michael Kitces, Josh Brown, or Ben Carlson? We've tried to do our part and help to promote and share research from up and coming "undiscovered" ...

How to Explain Momentum with Rational Investors — It’s complicated.

prop1
A recent theory paper from researchers at NYU and Rutgers attempts to explain the empirical evidence on stock serial correlation (e.g., short-term reversal, long-term stock reversal, and classic stock momentum). The interesting wrinkle with this paper is the authors don't need to assume irrational ...

Our Introduction to Alpha Architect Video

Alpha Architect_Final_300
The video maps out our mission, our core beliefs, and explains what we are trying to accomplish in the asset management business ...

Greatest Stock Picker of All Time: Buffett or Lynch?

Is Warren Buffett the greatest stock-picker of all time? Maybe not...
Who is the greatest stock picker of all time? Many investors knee-jerk reaction is Warren Buffett. Understandable response, but is that the answer? Maybe not... So who is the greatest investor of all time? A few years ago, I asked this ...

Active Versus Passive for the US and the Canadian Markets

Source: Morningstar
We all hear about the massive move away from active to passive in the US market. We also hear arguments that passive may eat the world and that active management is a zero sum game (seems like a reasonable hypothesis, ...

Performance figures contained herein are hypothetical, unaudited and prepared by Alpha Architect, LLC; hypothetical results are intended for illustrative purposes only. Past performance is not indicative of future results, which may vary. There is a risk of substantial loss associated with trading stocks, commodities, futures, options and other financial instruments. Please click Full Disclaimer for additional disclosures.

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