Episode 4 | The evolution of investing

Ask a question or send feedbackThis week, 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.(0:16 - 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 3.0MaterialsPursuing A Better Investment ExperienceThe Purposeful Investor Podcast is a public service provided for Australian investors wanting to make smart decisions with their money, avoid costly mistakes, look after the people they care about, and, have a great life!We draw on over 30 years of experience from David Andrew and the Capital Partners team.For more information on Capital Partners' award winning team, visit capital-partners.com.au. Have a question? Email us [email protected] episode provides general advice only. We do not consider your personal circumstances when we share this information. Always refer to your financial adviser for advice about your personal circumstances. Capital Partners Consulting Pty Ltd AFSL 227148 trading as Capital Partners Private Wealth Advisers ABN 27 086 670 788.