How investors form beliefs and make decisions
The implications of wishful thinking and subjective belief choice for endogenous disagreement among investors are substantial and can vary with economic conditions:
Is Sector Neutrality in Factor Investing a Mistake?
The justification for neutralizing sectors in factor strategies is a work in progress. To date, academic researchers haven't had an empirical model to mimic the impact of removing sector "effects" on the measurement and performance of factor strategies. The authors develop and test a two-component model to address the question of, "Is Sector Neutrality in Factor Investing a Mistake?"
Fee Variation in Private Equity
Given the significant growth of investment in private markets, there have been increasing demands for greater transparency in the operation and structure of private market funds. This paper aims to address questions such as whether fees are set uniformly within most funds, and if not, by how much do they vary.
Valuing Artificial Intelligence (AI) Stocks
While there is literature that describes the "domain" of artificial intelligence, there are very few, if any that analyze the valuation and pricing of AI stocks. The authors attempt to fill the void with a two part methodology.
Personality Differences and Investment Decision-Making
This study offers valuable information to provide insights into the underlying mechanisms driving investment behavior. For example, recognizing the impact of Neuroticism on belief formation and risk perception can help explain why some investors exhibit greater aversion to stock market volatility. Similarly, understanding how Openness influences risk preferences can shed light on why certain individuals are more willing to take investment risks than others.
Short Campaigns by Hedge Funds
Our analysis highlights the importance of short campaigns for understanding the economic impact of activist hedge funds.
Private Equity Performance Around the Globe
This study provides valuable insights into how private equity performs in regions outside North America, reflecting broader trends in global investment.
Robo-advisors: A well-researched topic
Along with the rapid growth in the utilization of robo-advisors, there has been similar growth in academic interest about robo-advisors. What is the current state and what are the main research streams in the literature?
Financial Literacy and Financial Resilience: Evidence from Italy
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.
Self-Declared Benchmarks and Fund Manager Intent: “Cheating” or Competing?
The paper aims to provide insights into the dynamics of benchmark selection, the effectiveness of Relative Performance Evaluation ( RPE ) incentivization, and the broader implications for fund performance and market competition.
Can ChatGPT Improve Your Stock Picks?
One use of the NLP (natural language processing) features of ChatGPT is to search out patterns in the immense amounts of news, data and other sources of information about specific stocks, and then efficiently convert them into summaries valuable for all types of investors. Can this be accomplished with useful results? The authors use the Q2_2023 period to test performance around earnings announcements. Earnings announcements and earnings surprises are informationally rich as well as challenging events for investors to analyze.
Professional Athletes and Money Skills
Until that framework is defined, an assessment of the financial acumen of professional athletes will remain unfocused. This research addresses that gap.
The Smart Money Can Buy Stocks, but They Can’t Sell Them
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.
Here are the themes found in financial planning research. What’s missing?
In this academic article, the authors pull together an analysis of the types of thematic structures found most often in financial planning studies as well as the theories most often referenced.
Financial Literacy in the US…Doesn’t look great!
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.
Is a quantitative defensive factor strategy feasible? Yes.
We examine the research around the question of what the proper framework for building a defensive factor strategy is.
Do racial barriers prevent Black and Hispanic households from pursuing financial advice?
This article seeks to examine what research says about the interplay between risk tolerance, financial literacy, and trust and their collective impact on the pursuit of financial advice by Black and Hispanic households.
Are stock returns predictable at different points in time?
For many benchmark predictor variables, short-horizon return predictability in the U.S. stock market is local in time as short periods with significant predictability (“pockets”) are interspersed with long periods with no return predictability.
Can Machine Learning help to select mutual funds with positive alpha?
Can machine-learning methods be used to predict the performance of active mutual funds, specifically in terms of alpha net of all costs? Answer: yes.
Do Polluters Earn Higher Expected Returns? Yes.
Hence, the major research question examined here is: What is the impact of industrial pollution on market pricing? Short answer: polluters have earned higher returns.