Investing Research Articles

A reader suggested that we evaluate the stock market forecasts of Jeremy Grantham, Chairman of GMO LLC. GMO LLC “is a global investment management firm committed to providing sophisticated clients with superior asset management solutions and services.” Its “client base includes endowments, pension funds, public funds, foundations and cultural institutions.” The predictions/recommendations evaluated here extend… Keep Reading

In this entry, we update our review of the weekly “Technical Market Insight” of BusinessWeek online by Mark Arbeter, chief technical strategist for Standard & Poor’s, since early 2003. The table below quotes forecast highlights from the cited source and shows the performance of the S&P 500 Index over various numbers of trading days after the… Keep Reading

…investors may want to consider how their cultural predispositions affect their processing of reported views of experts on financial markets.

…evidence indicates that stock prices react somewhat predictably in direction and magnitude to specific categories of news, but general market conditions may affect the reactions.

…evidence indicates that stamps probably underperform stocks, beat bonds and gold and tie art over the long run, with a return pattern somewhat like that of gold.

…evidence from simple tests on limited samples supports a belief that a strategy employing long-term simple moving average crossing signals to enter and exit equities may outperform a buy-and-hold strategy, depending on market conditions and the level of trading frictions/fees.

This sample is far too small for a Guru Grades-type review.

Some considerations that might make these results seem less than stunning are…

It is arguable that both momentum investing (trend-following, such as Decision Moose) and value investing (valuation-implied mispricing, such as Magic Formula Investing) are timing approaches at different horizons.

…financial advisors may be able to improve advisee satisfaction by refining the typical approach to risk tolerance measurement and accommodation. The self-advised can apply such refinement to themselves.