Investing 6.0—Modern Value Investing

Abstract

A modern value-investing approach—Investing 6.0—returns to the insights of value investing by arguing that investors should look forward, not backward, and estimate the income from their investments and their uncertainty about those estimates. One profitable consequence of focusing on long-term income uncertainty instead of short-term price uncertainty is the shunning of 60/40 portfolios that hobble long-run returns by investing too heavily in low-return bonds in order to reduce short-run price volatility that many investors should not care about.