CORRECTIONS: 0:45 - Index funds are not guaranteed to beat 80% of active investors (but they have in the past) 1:35 - Investing is more like a social science. In physics, there are laws we can rely on every time, where as social science is about learning from trends and patters that have occurred in the past, but, no matter how much evidence there is, we cannot be certain they will continue in the future.
@moniryousefian8782
8 ай бұрын
Could you please share what's your top 3 index Fund?! Greatly appreciated 🙏
@orcadian99
6 ай бұрын
@@moniryousefian8782 To buy on LSE, iShares ticker IWFM is World momentum factor. That ETF has 4 stars from Morningstar RatingsTM. But you wouldn't put invest all your eggs in 1 factor. iShares World Size Factor ticker is IWFS. iShares World Minimum Volatility Factor ticker MINV. iShares World Quality Factor is IWFQ. iShares World Value Factor is IWFV. Plus you need a bond ETF like LQDG (trades in GBP) or HLQD (trades in USD though both ETFs invest into USD corporate bonds), or construct a gilts ladder, for bond component of portfolio. Once you set that portfolio up it's for the long term at least 5 years+. Not for short term cash requirements. And not for frequent trading. And those ETFs aren't investment recommendations, it's just easy to find the Factsheet, KID and Prospectus for each of those Factor based ETFs on iShares UK website compared to the other asset managers because Blackrock (the asset manager behind them) are huge. You can create a dummy portfolio on FT.com under the portfolio section, with imaginary allocations to the ETFs you are thinking to invest in ("buy" your planned allocation of each ETF at the same date in the past for all of them at closing price, it shows you how it does over the years). That site also lets you graph each ETF by clicking on the name and choose other ETFs as comparators, so you visualise their relative volatility. If you want an audiobook on how index based investing was first invented - and how Blackrock later bought iShares from Barclays Global Investors after the 2008 world financial crisis when Barclays needed cash badly to avoid a bailout like RBS, and sold off the finest silver (its iShares unit) it had to get that - read Trillions by Robin Wigglesworth.
@thegadgetzone
2 жыл бұрын
Bro your kitchen is SO NICE.
@JamesShack
2 жыл бұрын
Ha, you should see all the crap that's piled up on the table behind me out of shot!
@JamesShack
2 жыл бұрын
And thank you. I can't take any credit for it tho (WIFE).
@rebel1052k
2 жыл бұрын
@@JamesShack Not heard of the WIFE ticker before, is that an ETF?
@JamesShack
2 жыл бұрын
@@rebel1052k haha. Yes - that’s it. I think it costs more than Berkshire shares. Probably due a stock split.
@JamesShack
2 жыл бұрын
I've left lots of links to further videos/reading in the description, please check them out!
@dirkhenninghaus4
2 жыл бұрын
Thank you very much dear James!
@calum6590
2 жыл бұрын
Great video James. I started factor investing or using tilts after reading Tim Hale's Smarter Investing. My utter disappointment when vanguard withdrew all the factor funds a while after. What is the best platform to factor invest in the UK and can it be done (at least to some degree) with Vanguard still?
@JamesShack
2 жыл бұрын
@@calum6590 iShares have a range of funds that are supposed to do the same thing and you can buy them through brokers like HL. However, I've never done any research on them so I'm not sure about the underlying methodology.
@richardwhiteside899
2 жыл бұрын
Another great video James - any chance you could cover Investment Trusts?
@Sylvan_dB
9 ай бұрын
Investing is not "a science like physics." Investing is more what is known colloquially as a "soft science" while physics is a "hard science". The reason is for investing you cannot form a hypothesis, make a prediction, create a test protocol and do a test to confirm or invalidate the prediction and thus the hypothesis. You can only analyze what has already happened thru statistical analysis which is subject to interpretation as to what is valid or not.
@ilsevanheerden4976
Жыл бұрын
I follow masses of financial youtubers, but you consistently add so much value. I've grown bored of some as I'm not learning anything new, but I always learn from you. Thanks for your time to educate us.
@JamesShack
Жыл бұрын
You're welcome!
@BF1GUN
5 ай бұрын
It just further endorses the requirement to start investing as early as possible and to ignore all the ups and downs. I have 6 years to retirement, and I need a lot of growth out of the markets during this time to have a comfortable retirement. Younger people should be very grateful that channels like this exist to educate people on finance. This should be a standard part of the school curriculum.
@ghgjftythnhcfghdty
2 жыл бұрын
Investing is not a science like biology or physics, it's a science like psychology or sociology. The distinction is important.
@JamesShack
2 жыл бұрын
Yes, I think that a better comparison.
@luisoncpp
Жыл бұрын
I think I have a pretty good reason to stick with factor investing: There is the possibility that the market does poorly for an extended period of time but the other factors behaving better, so I feel safer taking multiple independent risks rather than depending on a single one.
@davidcooks2379
7 ай бұрын
I had the vanguard Value ETF VVAL and they closed down right at the bottom. Active funds never again.
@davidwelburn
2 ай бұрын
How do you find low-volatility stocks, though? Is it more than just looking at the charts? From doing that a stock like National Grid seems an obvious choice.
@pecunia_non_olet
8 ай бұрын
i don't like factor investing, but i'm trying to understand if a total market index fund (msci world or ftse all world) could be really the total market..with about 67% usa and 25% tech..what do you think about that?
@ScottMaurer-g2b
9 ай бұрын
Don't forget there are costs associated with owning multiple funds and rebalancing across them. Transaction fees, taxable events, time out of the market and perhaps additional management fees. The most powerful advantage that index funds offer is their VERY low costs. The less you pay the more you compound which can be 100,000 dollars or more in missed compounding across the life of an investor building a retirement. so with any strategy not only must you outperform the market, but you must also do it by more than the additional costs you are incurring. There is also a risk in putting too much significance on the predictive power of back testing. Did smaller companies outperform in aggregate because of inherent factors related to their size or was that a result of a confounding variable like favorable economic conditions, the regulatory environment, tax policy, etc? Value stocks had a long period of outperformance but now value strategies are well understood and well subscribed to, is the advantage they had now priced into the market?
@mikerodent3164
9 ай бұрын
Haha. Yes. Imagine having to keep the faith year after year after year. To be fair to James these thoughts must have occurred to him. It'd be very nice to know how well his own investments have done over a significant period, and it'd be great if he could try to answer your points, which are spot on. Re multiple funds and rebalancing, there are in fact some iShares retail "factor-based" ETFs ... e.g. US46434V2741. OGC 0.15%.
@fredatlas4396
8 ай бұрын
I think better stick with low cost cap weighted broad market index funds etfs. You then get exposure to everything, the momentum, the value and growth etc at low cost
@ScottMaurer-g2b
8 ай бұрын
@@fredatlas4396 agreed
@Earth3077
8 ай бұрын
@@fredatlas4396 The market portfolio doesn't have exposure to any other factors, because you own companies with positive and with negative factor exposure, which cancel out.
@CharonNemesis
8 ай бұрын
Hi James, what are your thoughts on equal weight index funds vs their market weighted counterparts?
@daviddoughty8082
2 жыл бұрын
Is there a route for UK based private investors to directly access factor based funds?
@JamesShack
2 жыл бұрын
Yes, iShares offer a range of funds.
@mikeoxlong9559
2 жыл бұрын
Hi James, I’ve recently started investing in the FTSE global all cap index fund (Accumulation). What are you opinions on this fund? Many thanks
@mikeoxlong9559
2 жыл бұрын
I’m 21 so this will be a long term investment choice
@Toys4Life
5 ай бұрын
Small companies fail at a much higher rate than large companies. How do you pull long term small cap data without missing the companies that failed years (or even decades) ago?
@hl3641
2 жыл бұрын
More u know, the more u r capable of complexity, the much much u wanna stay in broad index etf
@hlaw5553
Жыл бұрын
Hi James, I like all of your videos but this is probably my favourite, amazing distilling of knowledge! Quick questions in the % of 5 year periods positive figure, what is the comparison against the momentum stock? What is it beating 94% of the time?
@parcvuemidtown9643
Жыл бұрын
Is factor investing a smart strategy for those over the age of 60?
@sleepless2541
Жыл бұрын
at that age i would tone down factor investing and instead focus more on adding some bond allocations, maybe you could have factor exposure for diversification benefits, but other than that i wouldn't want my near-retirement portfolio to be 100% or even 30% exposed to factors, as factors could underperform for decades
@blue-fj9ky
8 ай бұрын
50% US market index, 50% small cap value. Best of both worlds?
@M43782
5 ай бұрын
Have I just found a gem? Subscribed!
@kristianborisov5928
6 ай бұрын
What about viewing indexes as just one more factor and diversyfying among them and other known factors, which you mention the video?
@jquirkeable
2 жыл бұрын
This might be obvious but everyone holds the market then what drives share prices as nobody will be actively investing?
@JamesShack
2 жыл бұрын
It’s a good question. Active investors are required to keep markets efficient. At a point, so much money could be in index funds that the market is not longer good at pricing stocks. As such active investors would start to make good profits, and assets would flow into their funds away from passive. Thus there would be an equilibrium. At the moment index funds make up about 10% of trading activity, so we’re still a very long way off them distorting market prices.
@jquirkeable
2 жыл бұрын
@@JamesShack Thanks for that James. It’s a difficult one to hold in the head but, as Chris Dillow said the stock market is a voting machine not a weighing machine. So not much to be gained from logical analysis and hence why funds copying what the mass of investors do are best. I think you are converting me from active investment. If you haven’t done it, it would be good to see a video about counter party risk, the use of synthetic indices, etc
@ciaoatutti11111111
2 жыл бұрын
A breath of fresh air finally!
@JamesShack
2 жыл бұрын
Glad you enjoyed it!
@gmo709
Жыл бұрын
The funny thing is that Bogle actually doesnt believe in factor funds. And... factors... come and go according to him. It was a Morningstar interview and iut on KZitem.
@george6977
Жыл бұрын
Yes he created a growth, and value fund for growth and income investors respectively. Both performed equally well over 20 or 25 years but investors sold when they were out of fashion so underperformed the market.
@iantaylor2382
2 жыл бұрын
Thanks for introducing this concept to me, I appreciate your balanced delivery on these topics. It’s really helpful that you highlight both the positive and negative aspects. Keep up the great work.
@JamesShack
2 жыл бұрын
Thanks Ian, I will do.
@contactinspect
2 жыл бұрын
I wondwer is it an appartment or house?
@geoffreybennett4509
2 жыл бұрын
Hi -with 3 years to retirement is it worth using AVCS to increase my pension pot?
@123lowp
7 ай бұрын
Interesting approach, but you pick a specific date range to prove your point. You can back test and prove anything you want. I should make a video on buying 200k of Tapestry last month. That is what I did and it worked out well.
@nileshchauhan3663
7 ай бұрын
Im currently looking for a financial advisor and planner so would like to talk to you if that is possible
@xcjboy
2 жыл бұрын
Recently found your channel James and loving your content. Have you ever considered doing a video on strategies to manage your pension life time allowance? I’m in my mid 40’s, perhaps 10 years away from hitting the LTA (if all goes well) and trying to work out the most efficient options. There doesn’t seem to be much good material out there on this topic. Would love to hear your thought on the topic…
@MarkWebster1
2 жыл бұрын
This would be a great video topic!
@JamesShack
2 жыл бұрын
Ok sure thing. It’s an often misunderstood topic.
@xcjboy
2 жыл бұрын
@@JamesShack Awesome! Looking forward to it. Some things I've been mulling over..... 1) At what point should you dial back pension contributions to the minimum required to get your employer match and push the rest into ISAs? 2) As you get closer to the LTA should you keep more of your fixed-income % in pensions and keep ISAs for the higher growth/volatility of stocks and shares? 3) Should you consider pulling down the 25% lump sum as soon as you are eligible, as the LTA will most likely rise slower than your investment growth over time. 4) How to most effectively drawdown in the years before the final LTA check at 75? Obviously, it can still very much make sense to continue to contribute to a pension anyway if the tax savings outweigh the tax charge. In particularly if your salary is between £50k & £60k and you would get hit by the child benefit tax charge or between £100k & £125k with the withdrawal of the tax-free allowance.
@woof8813
2 жыл бұрын
@@xcjboy I’m also been thinking this. Regarding the 25% drawdown I’ve been wondering whether to do this and then invest it in an ISA for 5-10 years to get better returns than the pension fund or perhaps it just balances out….hmmm
@xcjboy
2 жыл бұрын
@@woof8813 Yes, I was thinking the same. One issue to be managed is even using a spouse’s ISA allowance you could only shelter £40k pa. So that’s 6+ years before you can get everything sheltered in an ISA and all the tax exposure over that time.
@RichSpeculation
2 жыл бұрын
1 month late to this party but anyway..... Factors are just strategies. Holding the whole market is a strategy. But the one thing the index has, that no other strategy has, is the resilience derived from the fact that it is never weighting any dollar of potential investment above that of another dollar. The market comes often with APPARENTLY worse risk adjusted returns than other strategies, but this is an artifact of statistical sampling. But actually the market comes with an inbuilt compensator for this higher "observed" risk - you are never positioned worse at the bottom of a crash, compared to all other possible portfolios and strategies on the whole, than you were at the top before that crash. I.e. if you think you did badly holding an index through a crash, the majority of other strategies did worse. And in the bounce back afterwards, again a different majority of other strategies will do worse. Factor investing is a kind of alternative market timing methodology really. All strategies involve timing choices, in that you have to evaluate against opportunity cost and pull the trigger on choices when compelled to, either by the strategy, or the drawdown depth, or the drawdown duration. You have a >95% chance of ballsing it up.
@xporkrind
8 ай бұрын
Love your videos. Highly clear and informative !!!
@stefanzurbruegg2047
9 ай бұрын
Hi James. Or someone else. Will one find low cost factor funds on platforms like HL? How do we find out about a simple list of ones to pick?
@lucafittabile8937
8 ай бұрын
very wise advise. thanks
@charlieaskew2362
11 ай бұрын
@jamesshack I’m interested how you manage currency exposure in yours/your clients investments. A lot of the funds I invest in are in USD and I’m concerned at the level of exposure I have to a single currency. Any advice please?
@mehawinct
4 ай бұрын
@JamesShack Thanks for a great video, exactly what I needed! Digging into factor investing and looking forward to checking out the Ben-Felix/RR video...
@gordonglenn2089
Ай бұрын
Interesting topic. I really appreciate that you are not just cheering on Factor investing. You are keeping it real with warnings along the way that it might not be a good fit for a lot of us DIY investors. Thanks for the information.
@arunmenon6513
2 жыл бұрын
Thanks again for explaining factor investing which I was completely unaware of. I think index investing is the best approach for me. It will be good to hear your thoughts re the much talked about new kid on the block- invest engine vs vanguard. Is that possible?
@paulmullan3582
2 жыл бұрын
Is there a single factor investing fund for uk investors?
@JamesShack
2 жыл бұрын
IShares have a series of funds.
@ikiruyamamoto1050
2 ай бұрын
I see a few problems. 1. You're cherry-picking your stats (e.g. 8:00 12/31/90 to 10/31/2011......."Lost Decade" anyone?!)! 2. You're just pushing "your book", and yet you never talk about the cost of hiring advisors like you for these fancy investment strategies! As Buffett has shown, the none of you "Masters of the Universe" can consistently beat low cost index funds.
@contactinspect
2 жыл бұрын
He speaks well...
@LeeSwim09
2 жыл бұрын
Are there reasonable UK alternatives to Dimensional for factor investing? iShares MSCI multi-factor for example?
@lc8666
2 жыл бұрын
Hi James, thanks for the information, any chance of video with more information on factor investment and how and we’re to invest. Thanks
@hermes8258
7 ай бұрын
Thanks for this theory. But when one is retired and will be dead in 10-15 years how practical is this? 06:14 graph demonstrates a very long timeline. 10:29 visual voice-over says underperformance 5-10 yeats at a time. Well, due to age mostly I look only 3-5 years into tye future. Another challenge I have is that ETFs do not favour small cap companies, ket alone small cap value ones. For example, I am bullish on India. However, almost all of the ETFs available are large and mid-cap. So, the question is how to find small cap value stocks?
@TeslaEVolution
5 ай бұрын
I can tell for SURE that if you invest $100k in SNP and $100k in QQQ and keep your funds - your QQQ will have done WAY better - the same principle for Russel that will beat SNP : )
@Jose_Lima
4 ай бұрын
Note: do not mistake High Volatility with High Risk 😏
@balliednerd7971
2 жыл бұрын
Question??? I am only 90% in the VUSA FTSE 500 and but 10% in all world. But this method (after 1 month) doesn't seem to be conducive to progression. Any tips and tricks you could bistow?
@The_Unintelligent_Speculator
5 ай бұрын
You still in VUSA?
@balliednerd7971
5 ай бұрын
@@The_Unintelligent_Speculator yup
@TeslaEVolution
5 ай бұрын
Risk ALWAYS correlates with Return. There is NO FREE LUNCH. Higher risk=Higher return over time is proven to be true.
@creatingbalancefinance
2 жыл бұрын
Really interesting video James. Factor investing is definitely something I’d like to learn more about and then I’ll decide if I’ve got the stomach for it! Thanks for the great content 👍
@JamesShack
2 жыл бұрын
No problem, and thanks for your continued support of the channel! Yes, it's definitely one to mull over. That's why I don't want to just put out a portfolio that people could copy without understanding it. You need to do the research yourself and fully get behind it before you dive in!
@iamjonezjonez4481
2 жыл бұрын
Hi James Help me with a question. Over the last 6 years l have built up a stock and shares isa of £40k. I will like to take out £30k towards a holifay home. How can l.do.this and will pay any tax.
@JamesShack
2 жыл бұрын
You don’t pay any tax on anything within an ISA. You can take it out freely.
@jjjonez3048
2 жыл бұрын
@@JamesShack Thank you James. Sorry to ask another questions, how does this affect my current 22/23 allowance. As l am taking out £30k, which has built up over six years.
@JamesShack
2 жыл бұрын
@@jjjonez3048 it does not affect it, you can still put £20k back into an isa this year
@jjjonez3048
2 жыл бұрын
@@JamesShack Thank you so much for the clarity.
@jtsandig
2 жыл бұрын
I don't see an issue factor investing into my retirement accounts since I know these values show up in in long time periods (20+ years)
@dean4111
2 жыл бұрын
Hi James, in relation to index funds and vanguard particularly, pricing. They typically seem to be more expensive per unit? If you can only invest small amounts ex £25 a month (the price of 1 unit) is this a bit counter productive in anyway than investing in cheaper alternatives and acquiring more units? Thank you
@JamesShack
2 жыл бұрын
You can by fractions of a unit.
@oumuamua1963
2 жыл бұрын
hi James I've just added cash to my 2021 vanguard Isa today 4th april but I haven't bought any funds yet. if I wait to later in this week to buy a fund would that mean I can't open a 2022 Isa with another platform. because of the cut off date. and can you sell and buy within an old fund as long as the money stat inside and is not withdrawn to your bank account.
@JamesShack
2 жыл бұрын
Hi - it's based on when you pay the money in. So you could open another one elsewhere.
@simonrlewis
2 жыл бұрын
Very Interesting. I suppose factor investing would not be recommended for people commencing, or already drawing down (due to periods of under performance)?
@pomme4moi
7 ай бұрын
Why does the title of this video target Vanguard index funds as opposed to Blackrock or other index funds? Some sort of ax to bring?😊
@JamesShack
7 ай бұрын
Keywords. Vanguard gets more views on KZitem than Blackrock.
@thatguy9051
9 ай бұрын
Fact: Factors Are Risky Factor investment strategies are not arbitrage opportunities. They provide long-term positive expected returns but also, on occasion, may suffer from severe short-term poor performance, bad medium-term disappointment, or even what seems like long-term futility
@arunpatel9298
Жыл бұрын
I'd be interested to see those curves based on the last 40 years only.
@kriztop
2 жыл бұрын
James, what's your opinion on holding $JPLG.L for global multi-factor exposure? (JPM Global Equity Multi-Factor UCITS ETF)
@wanderalmeida9584
2 жыл бұрын
Great content. New subscriber. Thanks from Brazil.
@JamesShack
2 жыл бұрын
Thanks!
@garethdwright91
2 жыл бұрын
Cheers, Shacknado.
@JulietHotelFoxtrot
7 ай бұрын
I seriously doubt the avg person can handle the tracking error of a factor portfolio. When you own the market portfolio and you're wrong, there's plenty of people to drink with while you all cry in your beers. "tough market isn't it, Randy. Boy, took a beating." "Yeah me too, paul. Maybe next year." When you have a really heavily factor tilted portfolio and you're wrong, all of those total market people are laughing at you while you're crying in corner by yourself. There's not very much company to commiserate with. You feel stupid. You feel like you're screwed up. You doubt yourself. That is what generates the returns of value I am convinced. Its now Feb 2024, NVDA went on a moonrun, and SCV investors are feeling the sting, you can see the capitulation especially on the Bogleheads forums. But the reality is, when it comes time to buy, you won't want to. Logically it makes very little sense to chase returns, but that's what humans do.
@8G00SE8
2 жыл бұрын
Why did Vanguard close their Vanguard Factor funds other than low demand, did they out perform their other funds?
@JamesShack
2 жыл бұрын
They closed them because there was a poor uptake from investors and the fixed costs involved with running the funds meant they were making a loss. They still offer the same funds out of the US.
@SkankyAli
2 жыл бұрын
@@JamesShack so it sounds like there is no easy UK option for factor investing except DIY (which doesn't sound easy!)?
@thomasfinnerty9420
2 жыл бұрын
Hi James, can you help me to invest.
@TheEnglishRedneck45
2 жыл бұрын
Caveats maketh a trustworthy individual - I really appreciate your focus on these later on in the video; it would have been so easy for you to gloss over these. Hefty kudos!
@JamesShack
2 жыл бұрын
Thank you! Has to be done.
@msarros1
2 жыл бұрын
Hi James, thank you for the video. I wish to ask you are there any fund (s) at present that provide factor/value investing in the UK for retail investors?
@JamesShack
2 жыл бұрын
IShares have a range of funds.
@ScipioAfricanus809
2 жыл бұрын
Hi Ben, would you consider doing a video on the Ishares factor ETF's with couple of sample portfolios for people at different points in their investing journey. I.e. 30 year old, 50 year old 65 year old etc. Thank you for such fantastic content.
@user-fv1576
9 ай бұрын
Amazing kitchen dinner. House must be massive !
@tomhiggins9074
2 жыл бұрын
+1 for further videos exploring the ishares funds. I found my way to this video after listening to the rational reminder and would love to have a genuine multi factor option in the UK. Possibly exploring the difference between this and the Dimensional approach?
@simonnicholls3650
2 жыл бұрын
James..I'll just stick with the index funds..About to retire and can't be bothered with the extra hassle.
@JamesShack
2 жыл бұрын
You’ll do just fine with them!
@Toys4Life
9 ай бұрын
This is good stuff and reminds me of an investing book I have in my library called - The Prudent Investors Guide to Beating the Market. A very good read!
@kevinhall8959
5 ай бұрын
Stay away from the stock market ,, consider Structured fixed interest loan notes . No fees no charges 1 yr or 2 yr term max Easy Strategy Not Rocket Science....
@jacc88888
11 ай бұрын
Interesting video. However since the pandemic and increased globalisation small companies are being clobbered. More and more it seems it will sadly be large corporations that will be driving things and governments are supporting this. Even if there are small companies thriving they may end up being bought out by the larger companies.
@raxj8257
2 жыл бұрын
Great video James. I have booked an appointment with Octopus Wealth this week to discuss investing savings. Hope your team can help! Would you recommend investing in REITs?
@maxless6655
2 жыл бұрын
Thank you, great insight.
@JamesShack
2 жыл бұрын
You're very welcome
@j4jjj
2 жыл бұрын
I like the concept of factor investing but in practice it fails because it introduces poor behaviours in investors such as timing the market. New investors will see their selecred factor underperforming and likely sell and switch to winning factors at precisely the wrong time
@JamesShack
2 жыл бұрын
I could not agree more. The urge to “Time” factors is very strong.
@stevie3452
2 жыл бұрын
What is the best way for UK investors to get factor exposure now that vanguard has closed them? What about if we wanted to put our pensions into various factors? (I’ve looked into doing this in HL and it’s not easy!)
@JamesShack
2 жыл бұрын
Blackrock has a range that is available in the UK. But unfortunately, it's not as easy as just sticking the odd fund in. You need to understand which factor you're looking for, how the fund works, and how it can fit into your portfolio. If there's enough demand I will do more videos on this!
@JamesShack
2 жыл бұрын
Better late than never!
@Khaiphos
5 ай бұрын
What have I stumbled into? 🥺
@thoughtsofmoog
2 жыл бұрын
I’m a big fan and love your work James. However, I can’t get through a Spider-Man with Andrew Garfield in it without thinking about my pension and portfolio :-) Take it as a compliment - he’s a handsome chap 🙂
@afridgetoofar1818
2 жыл бұрын
VTSAX & Chill, folks.
@progtom7585
2 жыл бұрын
Youve certainly piqued my interest, thanks very much for the video.
@JamesShack
2 жыл бұрын
My pleasure!
@danguee1
4 ай бұрын
6:47 Yeah, but.... Given that the graph is logarithmic - thanks! - the difference in small caps over big caps by 2022 is no bigger than it was in 1984. ALL the outperformance happened in the first 13 years. Since when, there's been no difference. There's always devil in the detail - and you should sniff this out and report it!
@markdillon5494
Жыл бұрын
Na I'm too lazy of an investor for that. Thanks for the info though.
@IamGrimalkin
2 жыл бұрын
Does factor investing work when you're investing on indexes or actively managed funds which happen to perform well in those factors, rather than doing factor investing directly?
@JamesShack
2 жыл бұрын
Factor Investing is very different from Traditional Active management. Active investment managers look for factors but they also try to time them - which is a very hard thing to do. Factor investing is about constructing systematic index type funds that have better allocations to areas of the market know for producing higher returns. I believe many of the concepts that you find in factor funds now will filter there way into normal index funds. There are now small cap value indexes - these did not exist before factor investing caught on.
@IamGrimalkin
2 жыл бұрын
@@JamesShack When I'm mentioning indexes, what I mean is; e.g. vanguards' emerging markets fund seems to have a lower p/b and a lower average market cap than the total world stock market. It's not designed to be a small cap value fund as such, but can it effectively act like one?
@fmlister
4 ай бұрын
Magic or God? Science describes God's creation.
@julius_nuernberger
11 ай бұрын
Nice summary of DFA's marketing. French and Fama have long upgraded their 3-Factor-Modell to 5-Factors. And honestly, how do you even measure the valuation of Tech Giant companies in an age of digitalization and a potential tech war against China? Quite frank, I am sick and tired of this pseudo-science. The actual science of investing has been solved.
@alexporter7003
2 жыл бұрын
Great stuff. I follow Ben Felix and Paul Merriman (currently put together a version of his ultimate buy and hold) It's a shame we don't get the options in this country like they have in the US with Avantis and also things like M1 finance where people can easily invest in these strategies at a click of a button.. I can only find one low cost small cap value etf and it's US only. Would love to see video of how you can use black rock funds! Ps been watching your great content for a while and happy to see you use Dimensional funds and this strategy!
@JamesShack
2 жыл бұрын
I personally have not done much research into the blackrock funds, or the methodology that they employ. But they seem to be the only option available so I may do a video on them at some point!
@battj1
2 жыл бұрын
Top video! I've recently discovered factor investing and am very interested! I like to keep my portfolio as simple as possible and like the sound of the iShare World Multi-Factor fund (all core factors in one). If only Vanguard (I don't like having multiple platforms) would introduce a similar fund!! Would be an excellent accompliment to my All-Cap...
@JamesShack
2 жыл бұрын
Yes, I'm sure they'll be back/other funds might open. Just be prepared that if you factor tilt, you have to do it for the LONG term! No bailing out.
@seans9096
Ай бұрын
If investing is science and Sir Issac Newton failed miserably. there are no hope for ordinary muggles.
@anonnymous4684
2 жыл бұрын
Interesting that Vanguard withdrew their product.
@JamesShack
2 жыл бұрын
Yes - due to low demand. The Blackrock funds however are doing well.
@voice.of.reason
2 жыл бұрын
Thanks for this video. For me, personally at my stage of life I have only 6 years to go until I can take a private pension it is not worth it. Though I probably won't start drawdown until at least 2033. I just need to tidy up my pensions into one place moving old company schemes into a SIPP. I was going to use Freetrade for the SIPP as it is only £7 a month if you have the 'plus' but I was put off by the lending of shares thing and the lack of what I would call proper customer service from Freetrade. Still trying to decide who to go with (total pot of about £160K)
@thomasbroker69
9 ай бұрын
Funny I’m in the same position, did you find a good alternative? Been looking at Hargreaves
@OfficialCcallum
2 жыл бұрын
Great video! I have my first child due soon, would a video on a junior s&s isa be of interest for you to do? I’m strongly considering vanguard and investing into vuag
@Jammy-Bread
2 жыл бұрын
For JISAs, I believe Fidelity don't charge platform fees at all, so may well be better than Vanguard. Personally I didn't use a JISA though as didn't like the idea of them suddenly getting access to a large pot of money at 18, when its impossible for me to know at this point whether or not they would be mature enough to handle that.
@JamesShack
2 жыл бұрын
James raises a good point. People often rush to JISAs, because it's in the Childs name. But often, they could just contribute to their own ISA, maintain control and give it when they needed. It's rare for IHT to be an issue especially when you have both surviving parents. It's a mental accounting thing. People like to have a separate pot dedicated for their kids. I will be doing a video on this soon.
@jaco111992
2 жыл бұрын
Ho James! Really appreciate your videos. I currently invest (as a European investor) in classic booglehead stuff vwce and small percentage of bonds. I would be happy to add some small cap value stock to the portfolio but here the only 2 etf possible are zprx and zprv for USA and European area. But no etf for world small cap value stock. Do you suggest to implement with these 2 etf or just keep the old way? Because with only covering USA and Europe we are missing a lot of stuff and maybe losing the diversification premia.
@JamesShack
2 жыл бұрын
I cant give a personal recommendation, but i would not settle for a substandard product. You should plan to have this strategy in place for 15-20 years so if it's the wrong product don't go for it. It may take a few years for the right product to come out but will be worth the wait!
@jaco111992
2 жыл бұрын
@@JamesShack I think exactly the same! Thanks for your work brother. Appreciate it so much
@woof8813
2 жыл бұрын
Very interesting video though I don’t think I have the temperment for it. I’d be interested if there are any ways in boosting a passive index such as vanguard life strategy 80 apart from just letting it do its thing over the next 15 years. I’m wondering whether to split my monthly contribution into a combo of life strategy 80 and 100, thoughts?
@JamesShack
2 жыл бұрын
The only way you boost a vanguard LS 80 is by going to LS 100! LS80 and LS100 are very similar it might be best to just stick with one and keep it simple.
@woof8813
2 жыл бұрын
@@JamesShack nice one, thanks for your reply.
@garybarnes9254
2 жыл бұрын
not to be cynical or anything but you've banged the Vanguard Index Fund drum for ages and now you come out and say this... just how much have Vanguard been paying you?!
@JamesShack
2 жыл бұрын
I'm not affiliated with Vanguard. I only talk about them because that's what everyone is searching for! I still think index funds are the best solution for 90% of investors.
@valourus
2 жыл бұрын
Hi James, I love your video's, I've been a long time watcher of Ben Felix. I do would like to add 2 small positions to hml and smb factors to get more diversification between different systematic risks. Online there is a lot of talk about which funds to pick to target those factors, here in Europe those VS etf are not available. How would I find good factor tilt ETF and where do I look at to know they are targeting it correctly? maybe another video idea ;)?
@JamesShack
2 жыл бұрын
In the UK there’s not much to choose from unfortunately. iShares do have a range but I’ve not done much research into them .
@valourus
2 жыл бұрын
@@JamesShack That has been my main issue... I hope it will become more accessible for retail investors in the future. For now, back to vwrl here in the Netherlands
@valourus
2 жыл бұрын
I found this video for anyone also wondering the same thing: kzitem.info/news/bejne/pqJmk6mvfqynoKg
@NedFlanders39
2 жыл бұрын
love the idea, but if i invested in small cap and value and then they unperformed for 20 years id really kick myself. Especially because my investment horizon needs to be somewhat flexible, as you never know when you want to buy the Tesla ;) Looking at other videos, momentum and quality look more consistent with shorter draw-down periods over the past 40 years, maybe that's something for me to consider. Great video as always, cheers James.
@bigdawg1353
2 жыл бұрын
Felt a bit like take a Red pill or the Blue pill moment there at the end of the video .... Ignorance is bliss, I don't want to know nothing.... Nothing... Apart from index fund investing. 😛
@JamesShack
2 жыл бұрын
I would agree! Keep it simple.
@sarchmaster5779
2 жыл бұрын
Thanks for the video James. When are we going to see Reddit activity as an official factor? :)
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