James Maendel - Factor Investing For Dummies

Factor Investing For Dummies

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright 2023 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Library of Congress Control Number: 2022946843

ISBN 978-1-119-90674-2 (pbk); ISBN 978-1-119-90675-9 (ebk); ISBN 978-1-119-90676-6 (ebk)

1. Chapter 26

1. Chapter 2
2. Chapter 3
3. Chapter 4
4. Chapter 5
5. Chapter 7
6. Chapter 8
7. Chapter 11
8. Chapter 12
9. Chapter 13
10. Chapter 14
11. Chapter 15
12. Chapter 16
13. Chapter 18
14. Chapter 19
15. Chapter 24

Factor investing has been flying under the radar for decades as professional money managers have successfully used them for better investment portfolio management and performance. But now anyone can find out about what they are and how they can successfully improve your investment success. Many financial planners, advisors, and portfolio managers have turned to factors so theyre not flying blind in volatile and uncertain markets. A factor-based approach has the power to level the playing field.

Factor Investing For Dummies helps you make sense of what has been a tested and proven approach that professional money managers have kept secret for nearly a half century and still popular and proven in todays turbulent markets.

Factor investing is generally new to the public and it can be so valuable to anyone managing an investment portfolio, especially stocks and stock-related funds. This book is laid out so you can go from learning what factors are to how to use them and which ones work best in varying economic conditions.

The early part of the book goes in the basics of factors and the different kinds there are. There are factors designed to do well in periods of economic growth and those that hold up well in bad times. Style (or microeconomic) factors are tied to the strength of the individual stocks (and their underling companies), while macro factors are tied to the general economic environment. Stocks and funds with macro factors have a a better chance of succeeding versus the general stock market.

The book doesnt stop at just factors; it rounds out a more complete picture so you dont miss a beat with your overall factor-based investing approach. You will find out that factor-based ETFs and mutual funds can be an easy way to incorporate factors in your investment picture. Need income? See how factors can help you generate dividend income or use call and put options for added income from your portfolio. We dont want you to just generate good gains and income from your factor-based approach; we also want you to keep the fruits of your investment labor by showing you how to use brokerage orders and tax strategies. Lastly, the book offers a wealth of resources and sites so you can keep learning about the new innovations, strategies, and tactics for successful factor-based investing long after you read your last chapter.

In writing this book, we wondered what a potential reader would need to know to find this book interesting. Here are some of the assumptions we came up with about you:

• You have an interest in getting better at investing.
• You are a novice or intermediate portfolio manager seeking reliable ways to enhance portfolio performance.
• You have experience with the stock market but want to do better.
• You are a financial planner or financial consultant seeking better ways to manage stocks and ETFs for yourself or a client.

In the margins of the book, youll find these icons helping you out:

Whenever we provide a hint that makes an aspect of factor investing easier or potentially more successful, we mark it with a Tip icon.