Bogleheads On Investing Podcast
Episode 027: Cliff Asness, host Rick Ferri
Oct 30, 2020
Cliff Asness, founder of AQR Capital Management, discusses his journey from being an unmotivated student to a finance and computer science enthusiast. He explains the correlation between momentum and value strategies in investing and the benefits of combining them. Additionally, he shares insights on evaluating the 60/40 portfolio, comparing international and US stocks, and the importance of diversification.
58:52
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Quick takeaways
- Incorporating factors like value and momentum into a portfolio can enhance risk-adjusted returns.
- Adding international stocks can provide diversification benefits and capture the value premium in different industry groups.
Deep dives
The Benefits of Diversification and Adding Value
Diversification across stocks and bonds, like the 60/40 portfolio, can be a good core strategy. However, there are ways to potentially improve upon the risk-adjusted returns of this portfolio. By incorporating factors such as value and momentum, which have historically demonstrated premiums, investors can enhance their portfolios. Adding international stocks to the mix can also provide diversification benefits, especially considering industry group weightings and valuation differences between the US and international markets.
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