Investing Research Articles

…evidence suggests that simple win-loss percentages from recent trades influence the future trading behavior of individuals, especially inexperienced traders, far more than does past bottom-line level of profitability of trades. Individual traders may want to consider whether they are motivated more by being right than by making money.

…investors should not view the mutual diversification power of stocks and bonds as constant for planning horizons of less than a complete business cycle.

…limited evidence from out-of-sample tests of TradingMarkets.com 2-day RSI trading rules for ETFs are mixed regarding a belief that they are reliably profitable. The reported in-sample results may have substantial data snooping bias.

…the Morningstar mutual fund rating system can probably help investors avoid funds with the worst future performance.

…the combined actions of information traders and trend followers typically eliminate 15-30% of the difference between market valuation and fundamental valuation in a year.

…limited evidence continues to suggest that, in aggregate, stock market gurus tend to anchor on bullish or bearish positions, regardless of actual market trends.

…the Fast Money experts as a group probably do not offer fast money with their stock picks, and their stock-picking ability as a group is unimpressive.

How do financial advisors affect the investing practices of individual investors? Does their advice decisively improve client performance, or are other factors more explanatory? In their February 2009 paper entitled “The Influence of Financial Advisors on Household Portfolios: A Study on Private Investors Switching to Financial Advice”, Ralf Gerhardt and Andreas Hackethal compare the portfolios… Keep Reading

Do hedge fund investors actually receive the returns reported for hedge funds, or does the timing of investments in these funds substantially affect experienced returns? In the March 2009 version of their paper entitled “Higher Risk, Lower Returns: What Hedge Fund Investors Really Earn”, Ilia Dichev and Gwen Yu measure actual hedge fund investor returns… Keep Reading

…traders may be able to exploit information on hedger and speculator net positions in the Commitment of Traders report to time positions in associated commodity futures.