Video: Smart Beta vs. Convergence

In this video, David W. Schulz, President of Convergence Investment Partners, discusses smart beta as it pertains to the fourteen characteristics of stock price behavior that Convergence has identified through their research. Each of the characteristics, including risk, relative value, price momentum, etc. can be considered a smart-beta strategy on its own.

According to Mr. Schulz, if you had purchased and held the stock that best fit each one of these fourteen “dynamic preferences” twenty years ago, you would have beaten the market with every one of them. However, as Mr. Schulz points out, most investor strategies are not likely to “buy and hold” for twenty years. He cautions investors to not become dependent on a specific strategy, because each one goes through cycles of good and bad performance.

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