Stock Trading News

Factor investing is a strategy that focuses on selecting securities based on certain characteristics – known as factors – that have been proven to drive investment returns over time. They exist, and aren’t arbitraged out of market, because they represent a form of risk compensation, not inefficiencies built into markets (which tend to be discovered […]

Stocks are often grouped by size because market capitalization fundamentally shapes liquidity, information flow, and who can participate. Large-cap stocks are heavily researched by institutional investors, sell-side research, retail investors, and are known globally.  They’re highly liquid and inefficiencies are stripped away by institutional and systematic capital. Alpha is difficult in large caps because most […]

Stocks are roughly divided into three camps when it comes to size. Large-cap stocks are heavily researched, highly liquid, and dominated by institutional and systematic capital. Because they’re so heavily picked over and covered, persistent alpha can be difficult to extract. (It’s not easy to have a unique insight on the world’s most covered stocks.) […]

Preferred stock is a type of equity that typically pays fixed dividends and has priority over common stock in the event of a liquidation. In short, they sit in between common stock and bonds in the capital structure of a company. Most companies don’t issue preferred shares, but some do. In terms of discussions on […]

Forward-looking real return expectations for US, global developed, and emerging market equities have declined meaningfully compared to historical averages. We look at the projected ranges and drivers of return across these regions for the next 10 years and beyond, based on valuation, macroeconomic, and earnings growth inputs.   Key Takeaways – Expected Real Returns of […]

Risk parity is an investment strategy that aims to balance risk across asset classes, rather than allocating more capital to traditionally “safer” investments like bonds. The goal is to create a portfolio with consistent returns, regardless of market conditions. It’s also sometimes called balanced beta. It does not generally involve any tactical trading outside rebalancing to […]

Market microstructure is a specialized area within finance that explains how assets are exchanged in markets. Though buying and selling in financial markets seems simple (there’s a buyer and a seller and they connect when bid/ask match), it’s actually a very deep topic. We’re not talking about more overarching strategies like value, macro, and so […]

The concept of leverage involves using borrowed capital for investment and amplifying the potential returns. While leverage can magnify profits, it also magnifies losses. Below we focus on how you can generate leverage in your portfolio, through options, futures, borrowing, shorting, and more.   Key Takeaways – How to Generate Leverage in a Portfolio Leverage […]

Gold is not used in most portfolios, which are typically a stock-bond mix. Gold nonetheless has value because of its unique properties as a non-financial store of wealth that has a strong track record of offsetting equity and bond declines. If we ignore other asset classes (most notably bonds), how would we optimize a gold […]

The momentum factor is an isolated characteristic of assets that shows that, on average, winners keep winning. The evidence for momentum is supported by decades of academic and practitioner research. Studies have shown momentum as a far explaining asset returns in the US as far back as the late 1800s and early 1900s. The evidence […]