Factor Investing Strategies

Factor investing strategies focus on identifying specific characteristics, or "factors," that can help predict stock performance. Common factors include value (buying undervalued stocks), growth (investing in companies with strong earnings potential), momentum (picking stocks that have performed well recently), and low volatility (favoring more stable stocks). By targeting these characteristics, investors aim to enhance returns and manage risks over time, rather than just relying on market trends or broad indices. This approach combines elements of both fundamental and quantitative analysis to create a diversified investment portfolio that leverages historical patterns in stock performance.