Investing Research Articles

…individual investors tend to limit buying consideration, detrimentally, to those stocks that grab their attention via unusual trading or other news.

…good (bad) macroeconomic news is bad (good) for broad stock indices during expansions and good (bad) during recessions.

…informed traders prefer price certainty over execution certainty unless the value of their private information is about to expire.

…the stock market shows significant predictability (rather than perfect efficiency) in its reactions to news.

…principles of evolutionary biology such as competition, mutation, reproduction, and natural selection drives the evolution of financial markets.

…expect single-digit long-term returns from stocks.

…investor sentiment tends to “predict” the past.

…very recent data suggests that short sellers may have lost their ability to predict bad news and stock price declines.

…mutual funds may function mostly as passive vehicles through which active individual investors (reallocators) voluntarily transfer wealth to public corporations. By doing the opposite of these individuals, one can construct a portfolio with high returns. By ceasing reallocations, mutual fund investors in aggregate could boost their Sharpe ratio by 9%.

…front-running the predictable effects of unusual mutual fund inflows and outflows on stocks held in common offers significant excess returns.