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Investing Research Articles

3182 Research Articles

Low Risk and High Return?

…investors overpay for volatile stocks over the long haul, most dramatically during bear markets.

Testing the Head-and-Shoulders Pattern

Does the head-and-shoulders stock price pattern embody investor attitudes that traders can exploit to earn abnormal returns? Or, does it represent an opportunity for the statistics-challenged to be fooled by randomness? In their October 2006 paper entitled “The Predictive Power of ‘Head-and-Shoulders’ Price Patterns in the U.S. Stock Market”, Gene Savin, Paul Weller and Janis… Keep Reading

Candlesticks? Fiddlesticks!

…neither bullish nor bearish candlestick signals reliably generate abnormal returns in the expected direction for large-capitalization U.S. stocks during recent years.

How Finance Professors Invest

…finance professors are mostly passive investors, but even those trying to beat the market clearly prefer popular investing indicators over formal (“academic”) valuation and asset pricing models.

The Value Premium Looking Forward

…investors have expected a fairly stable value premium of about 6% per year over the past 60 years, derived mostly from growth in dividends.

A Survey of the Factor Landscape

…there is considerable redundancy and invalidity among the many factors used to explain differences in returns among individual stocks. Three factors may be necessary and sufficient, with liquidity the most influential.

Conservatism Bias in Earnings Forecasts

…investors systematically overvalue (undervalue) stocks when they expect earnings per share to be low (high). Their expectations exhibit conservatism bias with respect to both the downside and upside extremes.

Investors as Social (Relative Wealth) Climbers

…status may be more powerful than wealth as a motivator, with significant implications for investor/trader behavior.

Does Earnings Acceleration Mean Anything for Investors?

…earnings acceleration helps explain stock returns, most notably when it amplifies the direction of earnings growth (both positive or both negative).

A 12-Month Cycle for Stock Returns?

…there is a tendency for stocks worldwide to reprise their monthly return behavior every 12 months, with intracycle reversals, over periods of many years. Results suggest calendar-connected market structures.