Academic Finance Research and Insights

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|Factor Investing, Larry Swedroe, Research Insights, 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, Research Insights, Podcasts and Video, 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|Research Insights, Factor Investing, Larry Swedroe, 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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Portfolio Tax Strategies: Section 351 vs. Exchange Funds vs. Long/Short Tax-Loss-Harvesting

By |April 1st, 2025|Research Insights, Tax Efficient Investing|

Three powerful strategies may help investors diversify concentrated positions while deferring or minimizing immediate capital gains taxes: ✅ Section 351 transactions (often used to seed new ETFs) ✅ Exchange funds (offered by firms like UseCache and traditional private banks) ✅ Long/short tax loss harvesting strategies (offered by firms like AQR or Quantinno using active trading to generate offsetting losses)

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