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.
Two investors can study the same rising market and reach opposite conclusions about what comes next. A new MIT working paper spanning 68 years finds that only the contrarian, sophisticated forecast has ever reliably predicted returns, while the bullishness of ordinary investors — the instinct behind chasing returns — predicts little or points the wrong way. Here is what seven decades of evidence say that feeling is really worth.
Robin Powell
Jun 227 min read
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