Investing Research Articles

…Outliers presents transformations of context to explain, retrospectively, why (positive) outliers in human performance are not really outliers but rather logical results of a “patchwork of lucky breaks and arbitrary advantages.” The book offers no proofs (or even examples) of the predictive power of the beliefs it advocates.

…evidence suggests that equity index options carry a price premium because of their value in hedging against shocks to return correlations among individual stocks. Options for individual stocks do not carry this premium.

…modeling suggests that sharp jumps in stock market volatility drive investors to overprice some equity index options, most consistently out-of-the-money put options.

…stock market momentum tends to affect the pricing of broad equity index options such that long options become less (more) desirable for playing continuation (reversal) of strong trends.

…investors may want to consider the cycle of stability, instability and collapse proposed via the Financial Instability Hypothesis (though unquantified) in judging the state of financial markets.

…investors may be able to use the Fed Model to enhance risk-adjusted returns via reduced portfolio volatility.

…investors with low-middle risk tolerance may accrue significant diversification benefits from adding proxies for real estate, commodities and high yield bonds to traditional portfolios of stocks, government bonds and cash.

…evidence from this laboratory test suggests that individuals tend to accept without checking the risk-reward judgments of financial experts.

…The Ivy Portfolio offers investors a well-reasoned, well-documented, easily understood and easily implemented approach to long-term, self-directed portfolio management based on disciplined asset class diversification enhanced by momentum. While investors should expect to underperform the modeled level of returns, the approach has considerable support from formal research.

…a portfolio that combines value and momentum strategies across global equity markets and other asset classes may offer investors relatively high returns with low volatility.