Adding a Single Rule to a Lazy Portfolio Isn't Good Enough

Jul 18 09:07 2019 Print This Article

Bolting just one step onto Lazy Portfolios lifts their gains. But that isn’t all investors want. Let’s build a superior strategy that’s still simple. • The noted academics Fama & French have demonstrated that ‘factors’ exhibit predictive power. It’s about time portfolios for individual investors accept these findings and update themselves to the 21st century.

Figure 1. Eugene Fama (left) of the University of Chicago and Kenneth French of Dartmouth College published in 1992 their “three-factor model,” which evolved in 1997 into the “four-factor model.” The fourth factor, of course, is momentum.

• NOTICE: This column will begin a temporary hiatus in August 2019. To continue receiving my articles, subscribe now to the free Muscular Portfolios Newsletter.

• This article is Part 2 of the conclusion to my analysis of Lazy Portfolios. If you missed the first half of the conclusion, jump back to Part 1. •

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