Enterprising Investor
Practical analysis for investment professionals

Data-Driven Investor


Navigating the Risks of AI in Finance: Data Governance and Management Are Critical

Big data-driven AI in financial services is a technology that augments human capabilities. We are living in countries governed by the rule of law, and only humans can adopt safeguards, make decisions, and take responsibility for the results.

Small Caps, Large Caps, and Interest Rates

The relationship between stocks and interest rates is not reliably stable. There are periods when equities are highly rate sensitive, and periods when they aren't.

Can Equal Weight Solve Our Concentration Crisis? Not So Fast…

Mega-cap concentration has exploded since 2015. The corollary to an increasingly top-heavy benchmark is that market diversification and breadth have never been more limited. A multifactor methodology can be a restorative balance to US equities when more traditional measures fall short.

Commodities for the Long Run?

Asset classes such as commodities have historically had notable diversification benefits for longer-term investors who are concerned with inflation.

Did Inflation Kill the CAPM?

While the immediate future may not be promising for the equity premium, it looks bright for factor premiums.

Gold and Inflation: An Unstable Relationship

While there are periods when gold has hedged inflation quite well, beware blanket claims of gold's inflation-hedging utility.

Monetary Policy and Financial Conditions: Meaningful Relationship?

An analysis of the Fed's recent rounds of quantitative tightening (QT) and quantitative easing (QE) yields actionable insights about the relationship between monetary policy and financial conditions.

Stocks for the Long Run? Setting the Record Straight

Stocks are a good investment long-term, providing that you dial in your expectations. New historical findings provide a richer, more complete understanding of international returns.

Investment Returns Are NOT Random

Are investment returns random across time as Burton Malkiel suggests in his book, A Random Walk Down Wall Street? There is notable disagreement on this topic. This research finds that practitioners may need to rethink their portfolio optimization routines.

What Price Risk? Unpacking the Equity Risk Premium

Stocks are a good wager over the long term, on favorable odds. But stocks remain a bet, and investors must grasp how much returns can vary over long time horizons.