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Investing Research Articles

3542 Research Articles

Testing the Indicators of Barchart.com

…Barchart.com generally leans a little the wrong way with respect to near term aggregate stock market action. This tendency is probably too weak to be tradable. Its indicators appear to overweight (underweight) the trend-following (reversal) nature of the market.

Indicators of Persistent Fund Manager Outperformance

…persistent outperformance in investing depends on the hard work of developing and applying valuable private information, not on reacting to what everyone else knows.

Hedge Fund Industry: Declining Performance and Increasing Risk?

…hedge fund industry net risk-adjusted returns are unremarkable and declining. The flow of new money to hedge funds may pressure hedge fund managers to take greater risks.

Classic Research: Separating Cash Flow and Discount Rate Contributions to Stock Returns

…separating stock returns into those driven by changes in cash flow and those driven by changes in the discount rate helps explain the size effect and the value premium.

Global Diversification: By Country or Industry?

…global integration is rapidly shifting the balance of diversification power from countries to industries (for investors who adhere to modern portfolio theory).

Earnings, Inflation and Stock Returns

…neither change in aggregate earnings nor the inflation rate alone is a good concurrent indicator for the overall stock market returns on a quarterly basis. However, because earnings growth and inflation are interrelated, they may together help forecast stock market behavior.

The Odds of Winning as an Active Trader

…this evidence suggests that the average day trader breaks even and that the most active traders may be the most successful.

Diversification for “Peak” Performance

…diversification produces “peak” performance by collapsing the probability of performance around the mean. With it, you will seldom fly high, or crash and burn.

Training for the Investor/Trader Hurdles

Investors and traders face three hurdles on the track to success…

Why Highly Volatile Stocks Tend to Underperform

…the idiosyncratic volatility premium is closely related to the value premium, with low volatility and high value stocks tending to outperform. Insensitivity to discount rate (inflation, interest rates) shocks is the common underlying factor.