Investing Research Articles

Here is this Friday’s installment of Avoiding Investment Strategy Flame-outs, a short book we are previewing for subscribers. Chapter previews will continue for the next four Fridays. Chapter 5: “Checking for Market Adaptation” “The market is a complex system with many interacting parts, and external influences. As in other social settings, there are two aspects to market… Keep Reading

As suggested by a reader, we evaluate here the public stock market forecasts of Louis Navellier. Forecasts since the beginning of 2004 come from his weekly “Marketmail” archive. Pre-2004 forecasts (back to March 2001) come indirectly via MarketWatch columns. Louis Navellier is Chairman of the Board, Chief Executive Officer and Chief Investment Officer of Navellier… Keep Reading

Do hopes and fears of U.S. election outcomes, and associated political machinations, alter the “normal” seasonal variation in monthly stock market returns? To check, we compare average returns and variabilities (standard deviations of returns) by calendar month for the S&P 500 Index during years with and without quadrennial U.S. presidential elections and biennial congressional elections…. Keep Reading

Is the Turn-of-the-Month (TOTM) effect, a concentration of relatively strong stock market returns around the turns of calendar months, persistent over time and robust to different market conditions. Does it exist for all calendar months? Does it persist throughout the U.S. political cycle? Does it work for different equity indexes? To investigate, we define TOTM… Keep Reading

How should global investors assess country sovereign bond and equity risks? In his July 2023 paper entitled “Country Risk: Determinants, Measures and Implications – The 2023 Edition”, Aswath Damodaran examines country risk from multiple perspectives. To estimate a country risk premium, he considers measurements of both country government bond risk and country equity risk. Based… Keep Reading

Do investors swing toward optimism around U.S. presidential inauguration days, focusing on future opportunities? Or, does the day remind investors of political uncertainty and conflict? To investigate, we analyze daily returns of the S&P 500 Index around inauguration day. We consider subsamples of no party change and party change. Using inauguration dates since 1928 and… Keep Reading

…evidence indicates that U.S. stock market returns may be significantly predictable during economic and political crises, but not during market bubbles and crashes. Investor misreaction to crises, not economic fundamentals, appear to drive stock return predictability.

…evidence does not support a belief that investors can generate excess returns using an industry allocation strategy based on U.S. presidential politics. Equity return anomalies based on party holding the presidency and presidential term year are marketwide phenomena.

…21st-century investors should curb their exuberance.

…a pro-Democrat/anti-Republican bias in the mainstream media may affect the economic risk perception of some investors/potential investors, thereby affecting stock valuations.