The Financial Forecast Center (FFC) forecasts the average value by month for the S&P 500 index for the current month and the next five months , including fairly large error ranges for 50% and 90%...
...the authors find that both market friction and investor irrationality play substantial roles in the pricing of stocks.
...commodity futures in aggregate offer a long-term return comparable to that of stocks, with less downside risk and a substantial diversification benefit for a stock/bond portfolio.
…is fear as a sales pitch.
...the Fed model and the long-term P/E mean reversion model are complementary perspectives on return prediction, with the former reasonably useful for forecasting up to three years into the future and the latter applicable over...
How well do commonly used valuation multiples align with actual stock prices? In their January 2007 paper entitled “Multiples and Their Valuation Accuracy in European Equity Markets”, Andreas Schreiner and Klaus Spremann investigate the accuracy...
...this review of mutual fund studies makes low-cost, broad market exchange traded funds sound good.
We evaluate here the advice offered in the “Trendspotting” column in SmartMoney.com by Igor Greenwald since October 2002 (the earliest available). Igor Greenwald was a regular writer and columnist for SmartMoney.com. The table below quotes forecast...
...(German financial) journalists show predictive ability in their (1) sell recommendations and (2) buy recommendations for value stocks and positive momentum stocks.
...earnings guidance/forecasts are probably more accurate (to be precise, less intentionally biased) post-SOX than they were pre-SOX.
...surprisingly strong (weak) aggregate earnings news, as an indicator of high (low) future inflation, may portend relatively low (high) future stock returns.
...mimicking the most informative actions of outperforming investors/traders reliably generates abnormal short-term returns. Such behavior may explain some of the momentum effect.
...the Sharpe ratio has such a high level of intrinsic variability that it is not a very reliable portfolio comparison tool.
...portfolio management based on statistically reliable characterization of the long-term trend of the stock market offers an economically significant advantage over approaches that ignore the long-term trend.
...individual investors should continually ask themselves whether their information gathering efforts support rational execution of new decisions, or merely feed overconfidence in past decisions.
...the volatility premium for individual stocks derives from volatilities implied by options prices rather than historical (realized) stock price volatilities. This premium may be concentrated in small growth stocks.
The more we study it, the smaller it gets? Or, the act of studying risk diminishes the fear of it?
...it is doubtful that commercial real estate experts can accurately forecast returns from investments in commercial properties by type or location.
...lead underwriter sell recommendations may be the only analyst calls worth tracking.
...small capitalization stocks with low past profitability may be key to exploiting the size effect.
...investors appear to overreact systematically in projecting a firm's earnings results to the near-term earnings announcements of peer companies.
..."much of the wisdom comprising the popular version of TA does not qualify as legitimate knowledge," and "TA must evolve into a rigorous observational science if it is to deliver on its claims and remain...
...mutual fund investors venturing into the international arena may want to apply these findings to screen funds according to size, age, fees, management and country.
...high mutual fund fees may signal poor investment returns, both before and after fees. Investors who focus on low-fee funds may enjoy a double payoff.
Here are three relevant questions...