Listen to Larry Swedroe for a timely look at how, for 20 years, his firm, Buckingham Strategic Wealth, has been using what he refers to as the science of investing (evidence from peer-reviewed academic journals) to help investors build more efficient portfolios—portfolios that not only have delivered higher risk-adjusted returns, but have significantly reduced the negative impact of rare events known as “black swans.”
Larry shares the “secret sauce,” which was adding exposure to factors (such as size and value) that provided a unique/independent source of excess return. And he explains how adding exposure to factors not only provides higher expected returns but also uncorrelated returns-resulting in investors being able to lower their portfolio’s exposure to market beta and increase their exposure to safe bonds.
