Investing Research Articles

...this review of mutual fund studies makes low-cost, broad market exchange traded funds sound good.

We evaluate here the advice offered in the “Trendspotting” column in SmartMoney.com by Igor Greenwald since October 2002 (the earliest available). Igor Greenwald was a regular writer and columnist for SmartMoney.com. The table below quotes forecast...

...(German financial) journalists show predictive ability in their (1) sell recommendations and (2) buy recommendations for value stocks and positive momentum stocks.

...earnings guidance/forecasts are probably more accurate (to be precise, less intentionally biased) post-SOX than they were pre-SOX.

...surprisingly strong (weak) aggregate earnings news, as an indicator of high (low) future inflation, may portend relatively low (high) future stock returns.

...mimicking the most informative actions of outperforming investors/traders reliably generates abnormal short-term returns. Such behavior may explain some of the momentum effect.

...the Sharpe ratio has such a high level of intrinsic variability that it is not a very reliable portfolio comparison tool.

...portfolio management based on statistically reliable characterization of the long-term trend of the stock market offers an economically significant advantage over approaches that ignore the long-term trend.

...individual investors should continually ask themselves whether their information gathering efforts support rational execution of new decisions, or merely feed overconfidence in past decisions.

...the volatility premium for individual stocks derives from volatilities implied by options prices rather than historical (realized) stock price volatilities. This premium may be concentrated in small growth stocks.

The more we study it, the smaller it gets? Or, the act of studying risk diminishes the fear of it?

...it is doubtful that commercial real estate experts can accurately forecast returns from investments in commercial properties by type or location.

...lead underwriter sell recommendations may be the only analyst calls worth tracking.

...small capitalization stocks with low past profitability may be key to exploiting the size effect.

...investors appear to overreact systematically in projecting a firm's earnings results to the near-term earnings announcements of peer companies.

..."much of the wisdom comprising the popular version of TA does not qualify as legitimate knowledge," and "TA must evolve into a rigorous observational science if it is to deliver on its claims and remain...

...mutual fund investors venturing into the international arena may want to apply these findings to screen funds according to size, age, fees, management and country.

...high mutual fund fees may signal poor investment returns, both before and after fees. Investors who focus on low-fee funds may enjoy a double payoff.

Here are three relevant questions...

...secondary stock offerings are bad news for companies in financial management mode and neutral news for companies in growth mode. Firm accounting data indicate a company's mode.

...data from Taiwan strongly supports the conjecture that investors avoid taking losses so that they do not have to admit mistakes.

...prior downward management of earnings (via accruals) is one reason that firms repurchasing shares generate subsequent abnormal stock returns.

Jim Cramer sent comments on our evaluations of his advice (“Jim Cramer Deconstructed” and “Cramer Offers You His Protection”). Because of the nature of Mr. Cramer’s initial message, we retain the personal nature of the...

...investors expect annual equity returns of 3-4% over the risk-free rate in coming years.

...the stocks of companies issuing equity and convertible debt tend to underperform over several years as they invest "easy money" into projects of diminishing returns.