Factor Investing

Factor investing is an investment strategy that targets specific characteristics or "factors" that tend to drive returns in the stock market. Common factors include value (buying undervalued stocks), size (favoring smaller companies), momentum (investing in stocks with rising prices), and quality (selecting financially robust companies). By focusing on these factors, investors aim to enhance their portfolio's performance and achieve better returns than the broader market. This approach relies on research showing that certain factors have historically outperformed others over the long term, allowing investors to make more informed decisions when selecting stocks.