FYI: A recent WSJ report says that “Revenues at HFT firms from U.S. equities trading were an estimated $1.1 billion last year, down from $7.2 billion in 2009.” That’s an 85% decline in under a decade! When it comes to business and markets in particular, edges don’t last very long. The brilliant mathematician Benoit Mandelbrot said it best, “Winning strategies tend to have a brief half-life.”
If this is the case, then what should investors make of the explosive rise in smart-beta strategies? Won’t every potential advantage they offer be arbed out by their popularity? Maybe. But maybe not.
Regards,
Ted
http://theirrelevantinvestor.com/2017/03/24/will-the-rise-of-factors-kill-factor-investors/
