Behavioral Finance

Advances in Investment Portfolio Management: November 12, 2020

Portfolio management refers to the selection of securities and their continuous shifting in the portfolio for optimizing the return and maximizing the wealth of an investor by analyzing the strengths, weaknesses, opportunities, and challenges for performing a wide range of activities related to a portfolio (Joseph & Varghese, 2017). Investing in the stock market effectively […]

A Couple Lessons Learned from Recent Experience

Not only did the investing herd have the outlook for rates wrong, but it was uniformly inquiring about the wrong thing. Asset prices are often set to allow for the risks people are aware of. It s the ones they haven’t thought of that can knock the market for a loop. Forecasters usually stick too […]

Why Market Timers Fail?

Stock market has seasonal effects and calendar anomalies, such as the January effect, the Halloween effect, the best six-month strategy, and the presidential election cycle. Seasonal and cyclical market-timing strategies challenge the Efficient Market Hypothesis (EMH). Market timers believe that the safest way to invest is to be out of the market by either be […]

Strategic Asset Allocation for Individual Investors

In developing strategic asset allocation, investors establish exposures to the asset classes agreed on their Investment Policy Statement (IPS); strategic asset allocation integrates investors’ financial objectives, risk tolerance, and investment constraints with their long-term capital market expectations. Strategic asset allocation is pivotal in executing investment plans. Strategic asset allocation specifies an investor’s desired exposures to […]

The Halloween Effect Revisit 万圣节效应

Historically, stocks tend to outperform in November, stall in December and January, and then resume higher in February and March. Stock markets have seasonal effects and calendar anomalies, which challenge the Efficient Market Hypothesis (EMH). The Halloween effect conveys investors’ belief that the average equity returns of November through April are significantly stronger than the […]