Stocks
EdgeStocks10 min read

Factors, Plainly: What Value, Momentum and Quality Actually Pay

The most researched systematic edges in equities, and the least exciting to run.

The premise

Cross-sectional characteristics — cheapness, recent relative strength, profitability, low volatility — have historically been associated with return differences that persist across decades and geographies. Constructing a portfolio tilted toward them is entirely mechanical.

The uncomfortable part

Factor premia disappear for a decade at a time. Value underperformed for roughly ten years before reasserting; participants who abandoned it in year eight experienced the full loss and none of the recovery. The strategy's edge and the investor's endurance are separate things.

Why it suits automation better than a person

Rebalancing on schedule regardless of how the last quarter felt is the entire discipline, and it is the thing humans reliably fail at. A machine rebalancing into what has just underperformed is doing the strategy; a human doing it is fighting themselves.

Educational, not directive. This is analysis of how a market behaves, not a recommendation to act in it. Strategy detail with conviction scoring and live sample sizes lives in the vault.
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