7 new theories of investment are explained below

Here are 7 new theories of investment that have gained popularity in recent years:

1. Factor-Based Investing

Factor-based investing is an investment approach that focuses on specific characteristics or "factors" that are associated with higher returns, such as value, size, momentum, and low volatility. This approach seeks to identify and exploit these factors to generate returns, rather than relying solely on traditional methods such as market capitalization or sector allocation.

2. Smart Beta Investing

Smart beta investing is a type of factor-based investing that uses alternative weighting schemes to create a portfolio that is designed to outperform the market. This approach seeks to identify and exploit specific factors that are not captured by traditional market-capitalization-weighted indexes.

3. Environmental, Social, and Governance (ESG) Investing

ESG investing is an investment approach that considers the environmental, social, and governance (ESG) factors of a company when making investment decisions. This approach seeks to identify companies that are well-governed, have strong social and environmental practices, and are likely to generate long-term returns.

4. Alternative Risk Premia (ARP) Investing

ARP investing is an investment approach that seeks to generate returns by exploiting alternative sources of risk premia, such as volatility, term, and credit risk. This approach seeks to identify and capture these alternative sources of return, rather than relying solely on traditional sources such as equities and bonds.

5. Machine Learning (ML) Investing

ML investing is an investment approach that uses machine learning algorithms to analyze large datasets and make investment decisions. This approach seeks to identify patterns and relationships in the data that can be used to predict future returns and make informed investment decisions.

6. Quantamental Investing

Quantamental investing is an investment approach that combines quantitative analysis with fundamental analysis to make investment decisions. This approach seeks to identify companies that have strong fundamentals, but may not be reflected in their current stock price.

7. Multi-Factor Investing

Multi-factor investing is an investment approach that seeks to identify and exploit multiple factors simultaneously to generate returns. This approach seeks to identify companies that have strong fundamentals, are undervalued, and have a high probability of outperforming the market.

These are just a few examples of the many new theories of investment that have emerged in recent years. Each of these approaches has its own strengths and weaknesses, and investors should carefully consider their own investment goals, risk tolerance, and market conditions before selecting an investment approach.