No. of Recommendations: 15
There is some research indicating a lasting advantage in return for small cap and value stocks, on average. I have some level of belief in that, since it squares with my knowledge of how behavioral economics interacts with the stock market. So, buying SCV in depths of a major bear market sell-off is a good play, and I don't have to worry about company specific risk, which is good because I don't have a very good record of picking stocks.
I have read quite a bit about that. I have read quite a bit about that. It is called the French Fama 3-factor model. Meaning factor 1 is equities do better than bonds, factor 2 is small cap does better than large cap, and factor 3 is value does better than growth. It was discovered in 1992. It worked amazingly well from the 1920's through the 1980s. However it has not worked on a consistent basis since 1990. That is 35 years. If something stops working for 35 years, I think it is safe to assume it no longer works.
I am a victim of it. I discovered it, just about the time it stopped working.
