Introduction to Factor Investing: Data-Driven Secrets to Outperforming the Market

Introduction to Factor Investing: Data-Driven Secrets to Outperforming the Market

An overview of the core concepts behind multi-factor models, covering factors such as value, momentum, and quality, and how data-driven stock selection works.

LifeFinAI14/06/2026 下午05:001 min
#Factor Model#Quantitative Investing#Stock Selection

What is Factor Investing?

Factor investing is based on academic research showing that stocks with certain characteristics (factors) tend to outperform the market over the long term.

Classic Factors

  • Value Factor: Stocks with low valuations tend to perform better over the long term
  • Momentum Factor: Stocks that have performed well in the past tend to continue that trend in the short term
  • Quality Factor: Companies with high earnings quality are more stable
  • Low Volatility Factor: Low-volatility stocks deliver better risk-adjusted returns

How to Apply It?

Through quantitative screening, multiple factors are combined to build a diversified investment portfolio.

⚠️ Disclaimer: This article is for educational purposes only and does not constitute investment advice. Investing involves risk.

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