Video Lesson
Prefer watching? This video covers the key concepts from this article.
Let Data Drive Decisions
Quantitative investing uses mathematical models and data analysis to make investment decisions, removing emotional bias.
Core Concepts
- Factors: Characteristics like value, momentum, quality that predict returns
- Backtesting: Testing strategies on historical data
- Risk Models: Understanding and controlling portfolio risk
- Diversification: Spreading bets across many positions
Common Factor Strategies
Value (buying cheap stocks), Momentum (buying winners), Quality (buying profitable companies), and Low Volatility (buying stable stocks) are well-researched factors.
Getting Started
You don't need to code. Factor ETFs and screeners make quantitative approaches accessible to individual investors.