JMF Capstone Wealth ManagementA New 4 Factor Investing Model – JMF Capstone Wealth Management https://www.jmfcapstone.com An Alabama registered investment advisor Fri, 21 Nov 2025 19:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 A New 4 Factor Investing Model https://www.jmfcapstone.com/2016/05/30/a-new-4-factor-investing-model/ https://www.jmfcapstone.com/2016/05/30/a-new-4-factor-investing-model/#respond Mon, 30 May 2016 09:00:55 +0000 http://evolvemypractice.com/?p=2829 For about three decades, the working asset pricing model was the capital asset pricing model (CAPM), with beta—specifically market beta—being its sole factor. Then, in 1993, the Fama-French three-factor model—which added size and value—replaced the CAPM as the workhorse model. By eliminating two major anomalies (the outperformance of small stocks and of value stocks), it...

The post A New 4 Factor Investing Model appeared first on JMF Capstone Wealth Management.

]]> For about three decades, the working asset pricing model was the capital asset pricing model (CAPM), with beta—specifically market beta—being its sole factor. Then, in 1993, the Fama-French three-factor model—which added size and value—replaced the CAPM as the workhorse model.

By eliminating two major anomalies (the outperformance of small stocks and of value stocks), it improved the model’s explanatory power from about two-thirds of the differences in returns of diversified portfolios to more than 90%. Thus, it was a major advance.

Read the rest of the article on ETF.com.

The post A New 4 Factor Investing Model appeared first on JMF Capstone Wealth Management.

]]> https://www.jmfcapstone.com/2016/05/30/a-new-4-factor-investing-model/feed/ 0