Top Five Articles from September: The Value Factor, Non-Retirement, Finance and Civilization

By Paul McCaffrey

Posted In: Behavioral Finance, Book Reviews, Drivers of Value, Economics, Equity Investments, History & Geopolitics, Portfolio Management, Private Wealth Management

1 . Finance: How It Made Civilization Possible

What is finance, where does it come from, and why does it matter? William N. Goetzmann addressed these questions in his presentation at the CFA Institute: 62nd Financial Analysts Seminar, leading participants on a tour through financial history. Paul McCaffrey shares Goetzmann’s insights.

2. There Is Value in the Value Factor

Interest in “factor investing” reached an all-time high in May, according to Google Trends. So Nicolas Rabener and his associates analyzed factor valuations using fundamental metrics and contrasted these current valuations with historical averages as a method to determine factor attractiveness.

3. Raising Modern Portfolio Theory (MPT) from the Dead

C. Thomas Howard and Jason Voss, CFA, have called for the demise of modern portfolio theory (MPT) and the capital asset pricing model (CAPM). They say “financial markets should be viewed and analyzed using a behavioral lens.” Nathan Erickson, CFA, CAIA, and Richard Stott have a different opinion.

4. Planning for a Non-Retirement

Much of financial planning focuses on retirement. But what if your client isn’t planning to retire? Barbara Stewart, CFA, explores the question.

5. Book Review: Exchange-Traded Funds and the New Dynamics of Investing

Exchange-Traded Funds and the New Dynamics of Investing by Ananth N. Madhavan is a comprehensive study of the structure, price dynamics, and valuation of exchange-traded funds (ETFs), writes reviewer Janet J. Mangano. It addresses their current uses in various investment settings and attributes the rapid growth of ETFs to factor-based investing and the rise of robo-advisers. The book is a fascinating deep dive into all categories of ETFs, including equity, fixed income, foreign currencies, and alternative investments, with a particular focus on issues of tracking and liquidity.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Tags: behavioral finance, capital asset pricing model, Financial History, Gender Diversity, Investment Decision Making, Markets and Economics, Modern Portfolio Theory (MPT), Portfolio Management Techniques, private wealth, Retirement, retirement planning, Women in Investment Management

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About the Author(s)

Paul McCaffrey

Paul McCaffrey was formerly the editor of Enterprising Investor at CFA Institute. Prior to that role, he served as an editor at the H.W. Wilson Company. His writing has appeared in Financial Planning and On Wall Street, among other publications. He is a graduate of Vassar College and the Craig Newmark Graduate School of Journalism at CUNY.