Investing Research Articles

Do funds based on Jim Cramer’s stock/market recommendations generate attractive returns? To investigate, we compare performances for Northern Lights Fund Trust IV – Long Cramer Tracker ETF (LJIM) and Northern Lights Fund Trust IV – Inverse Cramer Tracker ETF (SJIM) to that for SPDR S&P 500 ETF Trust (SPY). The prospectus for LJIM and SJIM… Keep Reading

Should retail investors accept the risk of non-execution and use limit orders to get better prices? In the August 2024 version of their paper entitled “Retail Limit Orders”, Amber Anand, Mehrdad Samadi, Jonathan Sokobin and Kumar Venkataraman evaluate use of limit orders for U.S. stocks placed by retail traders. They compare limit orders to market… Keep Reading

Do exchange-traded funds (ETF) that seek to mimic holdings of top-ranked hedge funds, firm insiders or other investing gurus offer attractive performance? To investigate, we consider nine ETFs, five live and four dead, in order of introduction: Invesco Insider Sentiment (NFO) – focuses on stocks attracting interest of insiders such as company executives, fund managers… Keep Reading

Can relatively modest large language models (LLM), pretrained with diverse financial information, effectively rank stocks? In their September 2024 paper entitled “Re(Visiting) Large Language Models in Finance”, Eghbal Rahimikia and Felix Drinkall introduce base and small versions of FinText, LLMs that are: (1) kept compact compared to state-of-the-art LLMs to allow practical use with personal… Keep Reading

Below is a weekly summary of our research findings for 10/14/24 through 10/18/24. These summaries give you a quick snapshot of our content the past week so that you can quickly decide what’s relevant to your investing needs. Subscribers: To receive these weekly digests via email, click here to sign up for our mailing list.

The Simple Asset Class ETF Value Strategy (SACEVS) includes an allocation to  iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) when the credit premium, measured monthly based on the difference between the  Moody’s Seasoned Baa Corporate Bonds yield and the T-note yield, is undervalued. Arguably, iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is… Keep Reading

Can investors use leveraged exchange-traded funds (ETF) to construct attractive versions of simple 60%/40% (60/40) and 40%/60% (40/60) stocks-bonds portfolios? In their March 2020 presentation package entitled “Robust Leveraged ETF Portfolios Extending Classic 40/60 Portfolios and Portfolio Insurance”, flagged by a subscriber, Mikhail Smirnov and Alexander Smirnov consider several variations of classic stocks/bonds portfolios implemented… Keep Reading

Can investors reasonably anticipate the signals (stock rankings) for stock anomalies that are based on firm financial information. In their August 2024 paper entitled “Predicting Anomalies”, Boone Bowles, Adam Reed, Matthew Ringgenberg and Jake Thornock investigate whether: (1) stock returns follow predictable patterns before availability of anomaly trading signals; and, (2) anomaly trading signals are… Keep Reading

Can market efficiency be falling despite ubiquitous data, computing and networking? In his August 2024 paper entitled “The Less-Efficient Market Hypothesis”, Clifford Asness argues that markets have become less efficient in the relative pricing of common stocks over recent decades. To make his argument, he relies on the ratio of expensive stock valuations to cheap… Keep Reading

Would someone who knows tomorrow’s financial headlines today be a good day trader? In their September 2024 paper entitled “When a Crystal Ball Isn’t Enough to Make You Rich”, Victor Haghani and James White report results of “The Crystal Ball Challenge.” They ask 118 young adults trained in finance to trade the S&P 500 Index… Keep Reading