Should you buy the best-performing factor now?

Summary: Factor investing always seems to have a clear winner, until it doesn’t. This piece explores why factor leadership keeps rotating, how behaviour turns cycles into mistakes and why choosing the “right” factor may matter less than how you stay invested through change. Investors have an instinct to buy what is working. In factor investing, that instinct is amplified as the scorecard is always visible. There is usually a “number one” factor staring back from recent returns. The trouble is, factors don’t stay winners for long. They rotate, reverse and often disappoint those who arrive late. That’s not a flaw in factor investing. It’s a defining feature. Each factor is built to work under specific market conditions and to struggle under others. Why factor winners keep changing Factor leadership shifts as market conditions change. Growth-led booms, liquidity surges, recoveries and stress periods reward different traits at different times. Investors, however, tend to chase what worked most recently. The performance of the Value factor offers a reminder