Many investors have come to accept the fact that the major factors like value and momentum will produce excess returns over the long-term. But what if the fact that these factors have become widely known and have strong evidence to support them has reduced or eliminated their effectiveness? In this episode, we discuss this idea with Adam Butler of Resolve Asset Management. Adam is one of the deepest thinkers that we know in the investing world. He is also a prolific writer and host of the popular Gestalt University podcast. We discuss: - The life cycle of investment factors and why the factors that have the strongest evidence to support them may be the most vulnerable to having their premiums reduced or eliminated - The framework for judging whether a factor has lost its effectiveness - How to construct an equity portfolio in a world where it is difficult to determine which factors will work going forward - The benefits of risk parity and why more investors don't use it. We hope you enjoy the discussion.

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ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

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Interview: The Birth, Growth & Death of Investing Factors with Adam Butler

Excess Returns