Investing Research Articles

How do the typical portfolio and performance of self-directed investors differ from those of investors who employ financial advisors? Do financial advisors systematically add value by providing information to, and tempering the irrationalities of, individual investors? In his March 2008 paper entitled “The Influence of Financial Advice on Individual Investor Portfolio Performance”, Marc Kramer compares… Keep Reading

…individuals should carefully consider whether validated information or peer pressure is driving their investing/trading behaviors.

How can investors and speculators tell foolish, theoretical and practical investing/trading schemes apart? In his August 2002 paper entitled “Cranks, Academics and Practitioners”, former head of quantitative strategies at Goldman Sachs Emanuel Derman briefly circumscribes this question. He notes that: “…[A]s I skimmed through the crank file I found it hard to feel superior. Instead,… Keep Reading

…statistical analysis of stock pricing noise explains both a size effect and an advantage of equal-weighted portfolios over capitalization-weighted portfolios.

…an oil price shock can be good, bad or indifferent for the overall U.S. stock market according to the cause of the shock. A shock driven by global economic expansion is a good sign for stocks.

…Regulation FD and the Global Analyst Research Settlements helped reduce earnings forecast bias by neutralizing conflicts of interests for equity analysts.

…testing indicates that the daily stated positions for the next trading day from Palisades Research have no power to predict next-day stock market returns.

…investors who believe that they can find fund managers who reliably generate alpha should consider the enhanced alpha for higher fee trade-off of 130/30 funds.

…investors should beware of the favorite equity investments of stock market newsletter gurus. Many favorites may be swing-for-the-fences speculations.

…inflation shocks significantly affected the U.S. stock market over the past half century, with disinflation (inflation) shocks increasing (decreasing) stock prices and promoting boom (bust) conditions.