Knowledge hub

The Evolution of Investing

Back to insights

By Capital Partners Podcast | The Purposeful Investor

In this episode of The Purposeful Investor, Aden speaks with Capital Partners Founder and CEO, David about the evolution of investing from the early 20th century to the present day.

They discuss the three major phases – Investing 1.0 which saw stock picking dominate the market in the 1950s and 60s limited by a lack of historical data and computing power. The rise of index funds in the 1970s marked Investing 2.0, made possible by increased data availability and the efficient market hypothesis. Systematic investing emerged in the 1990s as Investing 3.0, leveraging factors like company size, price, and profitability that research showed provided higher expected returns.

David and Aden provide statistics demonstrating index funds have significantly outperformed actively managed portfolios over long periods. The episode offers insight into how the investing industry has advanced its practices by incorporating evidence from decades of market data.

(0:00-0:16) Introduction

(0:16-1:42) Personal wins of the week

(1:42-2:18) The three phases of investing

(2:18-3:28) Investing 1.0

(3:28-7:02) Investing 2.0

(7:02-9:00) – Benefits of diversification

(9:00-11:02) Investing 3.0

For more information on Capital Partners visit capital-partners.com.au.

Have a question? Email us ask@capital-partners.com.au.

This episode provides general advice only. Always refer to your financial advisor for advice about your personal circumstances.

The information provided on this site is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different and you should seek advice from a financial planner who can consider if these strategies and products are right for you.

Ideas & insights

Knowledge Hub

Navigating Uncertainty in Share Markets

podcast

Forecasting the future | Unravelling the mysteries of market predictions and the lessons of 2008

Markets and Investments • Article

What it means to make consistently high-quality decisions

Wealth Planning • Article

These money intentions will transform your financial wellbeing

Lifestyle • Article