Academic Finance Research and Insights

A Good Sketch is Better than a Long Speech

By |May 21st, 2025|Elisabetta Basilico, Factor Investing, Research Insights, Other Insights, Behavioral Finance|

In the evolving landscape of financial technology, innovative methods are emerging to assess creditworthiness. One such approach involves analyzing borrowers' facial expressions during loan applications to predict delinquency risk. This study explores this novel intersection of psychology, machine learning, and finance.

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Profitability Retrospective: Key Takeaways for Investors

By |May 16th, 2025|Intangibles, Profitability, Quality Investing, Research Insights, Factor Investing, Larry Swedroe, Other Insights, Low Volatility Investing|

Profitability subsumes all of the quality factor, explaining both the performance of the strategies the investment industry market and the factors that academics employ—none of the quality factors generated significant positive alpha relative to profitability, the other Fama and French factors, and momentum.

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Cut Through the Noise! These Two Factors Tend to Drive Portfolio Success

By |May 8th, 2025|Factor Investing, Podcasts and Video, Research Insights, Investor Education, Value Investing Research, Momentum Investing Research, Size Investing Research|

Let’s break down how to build a robust factor portfolio—without getting lost in the weeds. We investigate which equity factors have the strongest historical returns and diversification benefits from a long-only perspective.

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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|Elisabetta Basilico, Empirical Methods, Transaction Costs, 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, Larry Swedroe, Factor Investing, 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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