Academic Finance Research and Insights

A New Approach to Regime Detection and Factor Timing

By |May 2nd, 2025|Research Insights, Factor Investing, Larry Swedroe, Other Insights, Tactical Asset Allocation Research|

The financial research literature has found that the performance of assets (and factors)  can vary substantially across regimes - factor premiums can be regime dependent.  Unfortunately, the real-time identification of the current economic regime is one of the biggest challenges in finance.

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How Tiny Price Differences Help Track Small Investors’ Trades

By |April 28th, 2025|Transaction Costs, Elisabetta Basilico, Empirical Methods, Research Insights, Other Insights, Behavioral Finance|

This article explains how researchers studied small investors' trading habits by looking at tiny price differences, called subpennies, in stock trades. They found that the current method to identify these trades isn't very accurate. By using a new approach, they improved the accuracy, helping to better understand how small investors buy and sell stocks.

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Enhancing Industry Momentum Strategies: Finding Hidden Neighbors

By |April 18th, 2025|Research Insights, Factor Investing, Larry Swedroe, Other Insights, Momentum Investing Research|

The main benefit of constructing industry momentum portfolios based on standard ICS is that it is straightforward and reproducible. However, that benefit may come at the cost of accuracy and oversimplification of complex industry relationships between companies.

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Investing Isn’t About Being Mostly Right 

By |April 8th, 2025|Financial Planning, Skewness, Podcasts and Video, Research Insights, Trend Following, Academic Research Insight|

Investing isn’t about being mostly right. In fact you can be mostly wrong and beat portfolios that were mostly right! Today, we’ll explore how investors can potentially improve portfolio outcomes by targeting two seemingly contradictory but deeply complementary systems as outlined in the latest Mauboussin-Callahan paper, Probabilities & Payoffs: The Practicality and Psychology of Expected Value. But understanding this counterintuitive reality requires a shift in mindset—one that embraces uncertainty and focuses on the power of diversification.

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Understanding What Drives Momentum in Global Stock Markets

By |April 7th, 2025|Elisabetta Basilico, Research Insights, Other Insights, Momentum Investing Research, Tactical Asset Allocation Research|

When information about a company comes out gradually, investors might not react strongly, leading to momentum. Other factors, like how a company's value is perceived, also play a role, but to a lesser extent.

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US Value Stocks Trading at Historically High Discounts

By |April 4th, 2025|Larry Swedroe, Factor Investing, Research Insights, Other Insights, Value Investing Research|

For equity investors there have been two major narratives over the last 17 calendar year period 2008-2024. The first is that US stocks have far outperformed international stocks. The other narrative has been the outperformance of growth stocks relative to value stocks.

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