Asness and Arnott Talk Market Timing, Smart Beta and Behavioral Biases

Maybe not always. At least that was the upshot of a debate between Cliff Asness of AQR and Rob Arnott of Research Affiliates, panelists at the recent Morningstar conference in Chicago. Although they debated various topics, they seemed to agree that value stocks deserve attention when they’re cheap. According to Asness, founder and managing principal […]

Four Conditions Reminiscent of 1999

Rob Arnott, founder and chairman of Research Affiliates, says that the recent market environment is reminiscent of 1999, just before the tech bubble burst. Writing in Barron’s, Arnott argues that the following four “conditions parallel the extremes of the late 1990s:” “Falling inflation expectations,” which Arnott argues “snap back in reasonably short order.” He observes […]

Asness vs. Arnott on Smart Beta, Factor Timing, and Performance Chasing

Cliff Asness, co-founder of AQR Capital Management, added fuel to the debate over “smart beta” investing with a recent paper attacking arguments made by Rob Arnott of Research Affiliates. Arnott, once understood as a proponent of smart beta approaches due to his research and development of fundamental indexing, claimed that many smart beta exchange traded […]

Diversification & Rock Bottom Valuations In the Third Pillar

Rob Arnott and Christopher Brightman of Research Affiliates recently discussed the allocation and performance of PIMCO All Asset Fund, which goes outside mainstream investments into what they describe as the Third Pillar. Arnott explains that a three-year bear market in Third Pillar investments has impacted investors’ outcomes and outlooks. Although the fund’s 7% loss from […]

Rob Arnott of Research Affiliates Says a “Smart-Beta Crash” is “Reasonably Likely”

MarketWatch reports that Rob Arnott, chairman of Research Affiliates, says that smart beta has now become so popular that it is dangerous. Arnott, whose research helped to fuel interest in smart beta funds, says that a “smart-beta crash” is “reasonably likely.” Smart beta funds have focused on stocks with characteristics such as low volatility or […]

Can Investors Time the Market By Going Against the Flow?

Yale professor Roger Ibbotson and Research Affiliates founder Rob Arnott debated the challenges and opportunities of timing the market at the 2015 Schwab IMPACT conference.  As reported by Financial Advisor, the two speakers generally agreed that “the stocks that are the most popular will do the worst, as Ibbotson said, or, as Arnott put it, […]

Arnott Still Sees Low Returns Ahead

While stocks have been climbing higher, fundamental indexing guru Rob Arnott of Research Affiliates hasn’t changed his outlook for the coming decade — and it’s not an optimistic one. In a recent column for MarketWatch, Mark Hulbert looks at a forecasting model Arnott uses that has been highly accurate over the past century-plus. The model […]

Arnott: Time To Take Risk Off Table

Top fund manager Rob Arnott says that it’s becoming “embarrassing” to admit you’re a bear lately, and that means it’s time to be cautious. “If you look at advisor sentiment surveys, you find that right now there are fewer bears than have been seen in these surveys except at extreme major market tops, such as […]

Arnott: “3-D Hurricane” Still Bound For U.S.

Though the market and economy have been looking up recently, Rob Arnott says he still expects a “3-D Hurricane” to cause problems in coming years. The three Ds — debt, deficit, and demographics — should cause investors to lower their expectations, Arnott said during the keynote session of the ETF Virtual Summit, Advisor One reports. […]

Where Arnott Sees Value

Rob Arnott of Research Affiliates and PIMCO is finding value in emerging market stocks and high-yield bonds. Arnott tells Brett Arends of The Wall Street Journal that emerging-market stocks have lagged those in the U.S. over the past five years, and are now considerably more attractive than U.S. stocks. And, while high-yield bond yields have […]

Top Forecasting Model Offers Bad News

Wondering how the stock market will do over the next 10 years? MarketWatch’s Mark Hulbert says one pretty reliable forecasting model has a disappointing answer. Hulbert says that the model — a variant of the “dividend yield model” — is indicating stocks will return just 5.6% annualized over the next decade, and that’s before inflation. […]

Arnott Sees Opportunities in Emerging Markets

Rob Arnott of Research Affiliates and PIMCO says emerging markets continue to offer some of the better investing opportunities. “Emerging markets, for the most part, don’t have large deficits; for the most part don’t have large debt burdens,” Arnott says in an interview with Index Universe’s Olly Ludwig. “Not because they wouldn’t be willing to […]

Arnott Likes EMs Over U.S. — For Stocks And Gov’t Bonds

Fundamental indexing guru Rob Arnott says U.S. stocks aren’t cheap, and thinks emerging market equities are offering much more value. “U.S. stocks are actually pretty expensive today, and here’s why,” Arnott recently told Fortune. “Earnings regularly swing above or below trend by a wide margin. Wall Street is brilliant at taking peak earnings and predicting […]

Arnott on the Courage to Rebalance

While most investors feel crushed when major bear markets hit, Rob Arnott says that they are missing a key point that turns conventional thinking on its head. In a piece for, Arnott says that most investors measure wealth in terms of their portfolio’s dollar value. But, he says, a better gauge is “the real […]

Arnott On Why It Wasn’t A Lost Decade

The “Lost Decade”: It’s a moniker that many stock market commentators have applied to the 2000s, a decade in which we saw two major bear markets and the S&P 500 benchmark ended up well in the red. But that doesn’t tell the whole story. “It was only a lost decade if you anchored on equities […]

Arnott: We’re In Recession; Emerging Markets Attractive

Rob Arnott of PIMCO and Research Affiliates says there are “pretty high odds” that the economy is in the second dip of a double-dip recession, and thinks emerging market stocks are looking attractive. Arnott tells MarketWatch that he thinks the second dip into recession likely started around June, and that buying opportunities in the markets […]