This book is a practical and unique investment resource designed to guide investors towards successful investing in the financial markets. It provides a selection of time-tested investment strategies to help investors enhance returns. Factor investing is positioned between active management and passive investing to combine their advantages. The book provides comprehensive coverage of common style factors such as quality and momentum in response to the rising investor interest in factor strategies. It presents a detailed description of the multifactor approach regarding its principle, investment merits and construction methods. The book also covers sustainable investing as it continues to rise in prominence across the investment sector. It employs an abundance of financial data, real cases and practical examples to help the audience understand different investment strategies in an interesting and informative way. The book is primarily written for private investors and investment practitioners such as equity analysts and investment advisors. It is also suitable for university students who are interested in learning practical investment strategies and traditional asset classes.
Author(s): Bill Jiang
Publisher: Palgrave Macmillan
Year: 2022
Language: English
Pages: 223
City: Cham
Preface
Disclaimer
Contents
About the Author
List of Figures
List of Tables
1 Investment Basics
1.1 Introduction
1.2 Time Value of Money
1.3 Investment Objectives
1.4 Risk Tolerance
1.5 Investment Constraints
Reference
2 Asset Allocation
2.1 Asset Allocation
2.2 Investment Vehicles
2.3 Investment Risk
2.4 Performance Attribution
References
3 Common Stock
3.1 Equity Investments
3.2 Equity Indices
3.3 Long-Term Performance
3.4 Equity Risk
3.5 Distribution of Stock Returns
References
4 Bonds and Cash
4.1 Bonds
4.2 Investment Benefits
4.3 Bond Risk
4.4 Credit Rating
4.5 Yield Curve
4.6 Bond Return
4.7 Cash
References
5 Precious Metals
5.1 Precious Metals
5.2 Historical Performance
5.3 Characteristics of Gold
5.4 Diversification Effect
5.5 Drivers of Gold Price
5.6 Investment Methods
References
6 Portfolio Diversification
6.1 Portfolio Diversification
6.2 Efficient Frontier
6.3 Downside Protection
6.4 Upside Capture
6.5 Risk-Adjusted Return
References
7 Loss Control
7.1 Disposition Effect
7.2 Breakeven Return
7.3 Profit Warning
7.4 Broker Research
7.5 Short Selling
References
8 Sustainable Investing
8.1 Sustainable Investing
8.2 ESG Factors
8.3 ESG Integration
8.4 Investment Benefits
References
9 Size Effect
9.1 Size Effect
9.2 Definition of Smallcap
9.3 Characteristics of Smaller Companies
9.4 Fama–French 3-Factor Model
9.5 Return Premium
References
10 Quality Investing
10.1 Quality Investing
10.2 Characteristics of Quality Companies
10.3 Quality Measures
10.4 Return Premium
References
11 Momentum Investing
11.1 Momentum Investing
11.2 Momentum Measures
11.3 Momentum Quality
11.4 Return Premium
References
12 Value Effect
12.1 Value Investing
12.2 Valuation Metrics
12.3 Return Premium
12.4 Return Decomposition
12.5 Return Forecasting
References
13 Dividend Yield
13.1 Dividend Investing
13.2 Dividend Yield
13.3 Return Premium
13.4 Dividend Safety
References
14 Volatility Effect
14.1 Volatility Effect
14.2 Capital Asset Pricing Model
14.3 Return Premium
14.4 Construction Methods
References
15 Liquidity Premium
15.1 Asset Liquidity
15.2 Liquidity Measures
15.3 Return Premium
References
16 Multifactor Investing
16.1 Multifactor Investing
16.2 Cyclical Performance
16.3 Investment Merits
16.4 Construction Methods
16.5 Factor Combinations
References
Index
