AGIC

Magic formula investing is a disciplined, rules-based strategy developed by Joel Greenblatt that aims to outperform the stock market by ranking stocks based on earnings yield and return on capital. It focuses on large-cap stocks, excluding financial and utility sectors, and involves systematic portfolio rebalancing annually. The strategy emphasizes rational decision-making and has shown historical backtested success against the S&P 500, although recent returns may not match earlier claims. Critics suggest that market changes and increased popularity may have diminished its effectiveness, but it remains accessible for average investors.

Magic formula investing is a disciplined, rules-based strategy developed by Joel Greenblatt that aims to outperform the stock market by ranking stocks based on earnings yield and return on capital. It focuses on large-cap stocks, excluding financial and utility sectors, and involves systematic portfolio rebalancing annually. The strategy emphasizes rational decision-making and has shown historical backtested success against the S&P 500, although recent returns may not match earlier claims. Critics suggest that market changes and increased popularity may have diminished its effectiveness, but it remains accessible for average investors.