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Can You Successfully Time Factor Investing?

Be aware of the two components of alpha: cyclical and persistent, says Rayliant Global Advisors' Jason Hsu.

Jason Hsu of Rayliant Global Advisors began his general session at the Morningstar ETF Conference in Chicago by showing how widely used strategic-beta ETFs have become in recent years, with total assets reaching more than $300 billion. The question has shifted, in Hsu's estimation, from "Should I try some strategic beta?" to "How should I allocate to strategic beta and time the trades?"

From there, Hsu had a challenge. He asked for a show of hands of who doesn't engage in timing because they don't believe it works. After a respectable number of attendees raised their hands, he countered with the claim that investors time their investing decisions much more than they think they do.