Academic Finance Research and Insights

Trend to Passive Investing Negatively Affecting Active Funds

By |February 2nd, 2024|Research Insights, Larry Swedroe, Guest Posts, Other Insights, Active and Passive Investing|

While the evidence makes clear that active management is a loser’s game (one that it is possible to win but so unlikely you should not try), we don’t want active managers to disappear. Hope should continue to triumph over evidence, wisdom, and experience because active managers help eliminate market anomalies and inefficiencies created by the misbehavior of investors (such as noise traders). That helps to ensure that capital is allocated efficiently.

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The Smart Money Can Buy Stocks, but They Can’t Sell Them

By |January 29th, 2024|Research Insights, Basilico and Johnsen, Academic Research Insight, Behavioral Finance, Corporate Governance|

The paper aims to investigate whether experienced institutional portfolio managers (PMs) exhibit behavioral biases in their decision-making processes, specifically focusing on the selling decisions.

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Moving Average Distance and Time-Series Momentum

By |January 26th, 2024|Research Insights, Factor Investing, Larry Swedroe, Trend Following, Momentum Investing Research|

For investors that use trend-following strategies, Avramov, Kaplanski, and Subrhmanyam provided new evidence supporting momentum strategies and showed that the distance between short- and longer-term momentum signals provides additional explanatory power in the cross-section of equity returns.

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Outperforming Cap- (Value-) Weighted and Equal-Weighted Portfolios

By |January 19th, 2024|Research Insights, Factor Investing, Larry Swedroe, Other Insights, Momentum Investing Research, Size Investing Research|

Antonello Cirulli and Patrick Walker, authors of the December 2023 study “Outperforming Equal Weighting,” examined whether equally weighted portfolios could be enhanced by avoiding negative exposure to some of the most prominent factor anomalies documented in asset pricing literature.

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Financial Literacy in the US…Doesn’t look great!

By |January 17th, 2024|Intangibles, Financial Planning, Research Insights, Basilico and Johnsen, Academic Research Insight, Corporate Governance|

This paper aims to analyze financial literacy in the United States, utilizing the most recent data from the National Financial Capability Study (NFCS) collected in 2021 by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation. The paper focuses on the importance of financial literacy, particularly in the context of the economic conditions in the US, such as the COVID-19 pandemic, inflation, and changes in the financial system.

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