A Factor Investor’s Perspective of the Economic Cycle
Does the economic cycle have any bearing on investment success? Macro investment houses have constructed intricate frameworks to understand the “economic machine,” but economic data are notoriously prone to revisions, lags, and adjustments in measurement through time—none of which are suitable for timely and reliable investment signals. Certain fundamental characteristics—not economic variables—drive stock returns. This piece identifies investment themes that deliver persistent outperformance in multiple different economic environments.
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