Academic Finance Research and Insights

Breaking Bad Momentum Trends

By |March 15th, 2024|Research Insights, Factor Investing, Larry Swedroe, Other Insights, Momentum Investing Research|

In their two papers, Goulding, Harvey, and Mazzoleni showed that observed market corrections and rebounds carry predictive information about subsequent returns and showed how that information could be utilized to enhance the performance of trend-following strategies by dynamically blending slow and fast momentum strategies based on four-state cycle-conditional information.

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Exchange Funds 2.0: A Newly Accessible Way to Diversify Concentrated Positions

By |March 14th, 2024|Research Insights, Tax Efficient Investing|

When investors have a concentrated stock position that has performed well, they eventually face the same tough question: Should they continue to hold the position (and the outsized exposure it brings to their portfolio) or diversify – and face significant capital gains taxes?

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Betting on a Short Squeeze as Investment Strategy

By |March 8th, 2024|Skewness, Research Insights, Factor Investing, Larry Swedroe, Guest Posts, Other Insights, Tactical Asset Allocation Research|

Short squeezes are often associated with a large positive jump in the price of a stock. Filippou, Garcia-Ares, and Zapatero demonstrated that skewness-seeking investors try to identify securities that could experience a short squeeze in the near future and are willing to pay a premium for them. That results in an overvaluation of the options and, on average, negative returns. Investors are best served to avoid investments with lottery-like distributions. One way to do that is to turn a blind eye to social media sites like Robinhood and Reddit so you don’t get caught up in the hype and excitement. That’s another example of why retail investors are called “dumb money.” Forewarned is forearmed.

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Financial Literacy and Financial Resilience: Evidence from Italy

By |February 26th, 2024|Financial Planning, Research Insights, Basilico and Johnsen, Academic Research Insight, Behavioral Finance, Corporate Governance|

The paper aims to contribute to the literature by providing insights into the current state of financial literacy in Italy, its implications for financial well-being and resilience, and the demographic disparities therein.

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