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What is evidence-based investing?

Nobody can establish who first used the phrase 'evidence-based investing', and no regulator defines it. Robin Powell, who was given the name by Larry Swedroe in 2015 and is sometimes wrongly credited with coining it, sets out what it actually means: four tests of what counts as evidence, borrowed from a medical parallel that hit the same crisis twelve years ago. Including where he goes further than a global tracker, and why he holds that position less firmly than he used to.

Robin Powell

Victorian railway viaduct at dawn, illustrating the historical evidence behind AI and stock returns

AI and stock returns: lessons from the railways

he most careful expert forecast of AI's economic effects covers GDP, productivity, employment and inequality. It does not cover share prices. Across 21 developed markets and 120 years of data, economic growth has shown no reliable positive relationship with what shareholders earn. What has correlated is growth in earnings per share, and four mechanisms separate the two. Here is what the evidence says about AI and stock returns, and what the railways and the dot-com boom alrea

TEBI

Aug 410 min read

A living room in the evening with a financial news broadcast playing on a wall-mounted television, a phone lying face-down on the sofa arm and a mug of tea on the side table

The 'biggest market anomaly ever found' — and why you still can't beat the market

A new working paper has documented the largest price inefficiency ever found in the stock market: a pure-news signal with a Sharpe ratio of 3.1, more than double any known factor. But the researchers used a frontier AI model, millions of news articles and institutional trading costs to find it — and the same evidence that shows markets are inefficient also shows why an ordinary investor still can't beat them.

Robin Powell

Jun 199 min read

Investor studying an AI assistant on screen, an image of cognitive surrender in financial decision-making

Cognitive surrender: what AI is doing to investors' judgment

AI now sits beside roughly a third of British retail investors as they make money decisions. New research from Wharton, MIT and a Nobel laureate puts a number on what it's doing to their judgment: confidence rises by nearly 12 percentage points, even when the AI is wrong half the time. The researchers call it cognitive surrender — and the investors most prone to it are the ones least likely to notice.

Robin Powell

May 288 min read