Investing Research Articles

A subscriber requested evaluation of three retirement investment alternatives, assuming a constant increment invested at the end of each month, as follows: 50-50: allocate each increment via fixed percentages to stocks and bonds (for comparability, we use 50% to each). Seasonal 1: during April through September (October through March), allocate 100% of each increment to… Keep Reading

“Exploiting the Presidential Cycle and Party in Power” summarizes strategies that hold small stocks (large stock or bonds) when Democrats (Republicans) hold the U.S. presidency. How has this strategy performed in recent years? To investigate, we consider three strategy alternatives using exchange-traded funds (ETF): D-IWM:R-SPY: hold iShares Russell 2000 (IWM) when Democrats hold the presidency and SPDR… Keep Reading

Past research relating U.S. stock market returns to the party holding the Presidency mostly concludes that Democratic presidents are better for the stock market than Republican presidents. However, Presidents share power conferred by the electorate with Congress. Does historical data confirm that Democratic control of Congress is also better for stock market returns than Republican… Keep Reading

Each year in December, as for this year, Barron’s publishes its list of the best 10 stocks for the next year. Do these picks on average beat the market? To investigate, we scrape the web to find these lists for years 2011 through 2020, calculate associated calendar year total returns for each stock and calculate… Keep Reading

Below is a weekly summary of our research findings for 1/4/21 through 1/8/21. 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.

How might crypto-assets transform finance? In their December 2020 paper entitled “DeFi and the Future of Finance”, Campbell Harvey, Ashwin Ramachandran and Joey Santoro examine the potential for decentralized finance (DeFi) to disrupt traditional financial infrastructure. They summarize origins and essential features of DeFi, its potential to improve traditional finance and its risks. They also… Keep Reading

Does the level of, or change in, the annual U.S. federal deficit systematically influence the U.S. stock market, perhaps by stimulating consumption and thereby lifting corporate earnings (bullish) or by igniting inflation and thereby elevating discount rates (bearish)? To check, we relate annual stock market returns to the annual surplus/deficit (receipts minus outlays) as a… Keep Reading

Is copper price a reliable leading indicator of economic activity and therefore of future corporate earnings and equity prices? To investigate, we employ the monthly price index for copper base scrap (not seasonally adjusted) from the U.S. Bureau of Labor Statistics, which spans multiple economic expansions and contractions. Using monthly levels of the copper scrap price… Keep Reading

A subscriber asked about current evidence that high-dividend stocks outperform the market. To investigate, from a practical perspective, we compare performances of five high-dividend stock exchange-traded funds (ETFs) with relatively long histories to that of SPDR S&P 500 (SPY) as a proxy for the U.S. stock market. The five high-dividend stock ETFs are: iShares Select Dividend… Keep Reading

Do investors swing toward optimism around U.S. presidential inauguration days, focusing on future opportunities? Or, does the day remind investors of political uncertainty and conflict? To investigate, we analyze daily returns of the S&P 500 Index around inauguration day. We consider subsamples of no party change and party change. Using inauguration dates since 1928 and… Keep Reading