Factor Investing is an investment strategy that focuses on specific characteristics, or "factors," that can drive higher returns. Common factors include value, size, momentum, and quality. Investors use these factors to select stocks or other assets that are expected to outperform the market based on historical performance. This approach is grounded in the idea that certain traits can lead to better investment outcomes over time. By analyzing these factors, investors aim to build a diversified portfolio that balances risk and return, potentially enhancing overall performance compared to traditional investment methods.