With rules-based factor strategies, investors can know from historical data that the strategy will have periods of over- and under-performance, making it easier to lean into underperformance with confidence; with discretionary active strategies, it's unclear whether underperformance signals an opportunity to double down or a red flag to exit.

causalpending

Speaker

Ben Carlson

Evidence Quote

if you invest in an asset class or a rules-based strategy you know that it's going to come in and out of favor... when it does under perform I can lean into the pain... with an active strategy it's much harder to know is now the time to lean into the pain

Source

Practical Lessons from Ben CarlsonExcess Returns
Created: 8/11/2026, 7:52:29 AM

My Notes

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