Common Sense Trumps Smart Beta

Common Sense Trumps Smart Beta by Kendall J. Anderson, CFA, Anderson Riggs Investments

[buffett]

Every few years or so the powerful money men of Wall Street come up with a new idea they believe will lead to unimaginable wealth for their clients and themselves.  These ideas often stem from rigorous statistical studies which attempt to confirm that a particular idea offers better than average returns to investors.

Of course, in the world of academia, any believable idea originally promoted by one researcher will quickly be followed by additional research from academics around the world expanding on, reinforcing, or contradicting the original study.  With the passage of time, the studies find their way into the hands of those on Wall Street...