The Halloween indicator, popularized by the well-worn adage, “Sell in May and go away,” holds that stocks offer their best returns during the November through April period. Recent research seems to confirm earlier studies, which have found that this stock market anomaly dating back at least to the 1930s has not been arbitraged away, and in fact, is stronger than ever.
John Linehan, CFA, head of U.S. equities and portfolio manager at T. Rowe Price, describes his firm’s investment philosophy and the value of “constructive dissonance,” and discusses why maintaining a global perspective is more important than ever.
A seemingly endless battle is waged between believers in the efficient market hypothesis, such as Eugene Fama, and believers in behavioral finance, such as Daniel Kahneman. Regardless of your perspective, an analysis of the S&P 500’s history of sigma events provides an interesting field for the battle to be waged.
John P. Calamos, Sr., discusses the rise of the middle class in emerging markets and what investors in these markets should focus on.
Based on a review of the aggregate filings for the second quarter of 2012, institutional investors added to their holdings in consumer staples and health care stocks while reducing their exposure to the technology and energy sectors.
In a poll conducted earlier this week, CFA Institute asked its members if tighter regulation of high-frequency trading would meaningfully reduce technical glitches in the stock market. Not surprisingly, nearly two-thirds of respondents thought that tighter regulations would indeed be effective.
Due to a phenomenon known as counterfactual thinking, silver medalists are often less happy than Olympians who capture the bronze. Studies show that counterfactual thinking can also influence how finance professionals pick stocks.
Well-known blogger Joshua Brown, a.k.a The Reformed Broker, recently offered five reasons why Americans are fleeing the stock market. While he makes some sound points, he neglected to account for one key factor affecting stock market performance in the last few decades: the bubble in demand for equities created by Baby Boomers.
Robert Jenkins, FSIP, cites the flaws in the traditional return on equity (ROE) measure in measuring bank financial performance and proposes some much needed alternatives.
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