Using Factors To Lower Risk
Many investors today are confronting what could be considered a “perfect storm” that is creating strong head winds against the pursuit of higher expected returns. So far, we have discussed the main factors currently working against investors, as well as some steps they might consider taking to help combat this problem.
We will now examine why increasing your exposure to certain investment factors not only can provide higher expected returns and a diversification benefit, but also can help mitigate risk.
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