A Focus on Factors

There are literally thousands of publicly traded companies on the market these days covering every business and sector known to man. But with so many stocks on the marketplace, how do you know what separates a good stock from a bad one?

For Warren Buffett, that knowledge comes naturally. For the rest of us, it can seem like a losing battle. One person’s value could be another’s value trap.

This is why factor or fundamental investing has become so big. By examining a basket of various traits that most successful stocks have, asset managers can hone in on what works. For investors, that means potentially shifting their portfolios to meet the current market environment.