Stock Market Investment
Author name :- Kunal Kotgire
Roll no:-0222093
Is smart beta investing profitable? evidence from the Nordic stock market.
SILVASTI, V.; GROBYS, K. says that This passage discusses the increasing popularity of smart beta investing among private and institutional investors. The FTSE Russell has conducted annual smart beta surveys among its institutional client base since 2014, and the most recent 2019 survey showed that 83% of asset owners globally have a smart beta investment allocation. Smart beta strategies are long-only strategies that aim to outperform the benchmark index through alternative weighting methodologies that exploit investment styles such as size, value, momentum, and low beta. One way to implement multi-factor smart beta strategies is the mixing approach, which combines two or more long-only strategies focusing on individual styles. Another way is the integrating approach, which selects stocks that have simultaneous exposures to multiple desired risk factors while mitigating negative exposures to undesired factors. The passage highlights that the literature has not yet agreed on which approach is superior. The authors of this passage examine the profitability of the mixing and integrating approach when implementing multi-factor smart beta strategies in the Nordic equity market.
Quality investing in Asian stock markets.
UCAS, D. says that this article discusses the potential benefits and drawbacks of investing in the stock market for public pension plans, with a focus on developing markets. The article argues that simply investing in the stock market does not necessarily provide additional incentives for savings and may not lead to increased economic growth. Additionally, raw comparisons between stock market returns and pensioner returns can be misleading without considering the risk characteristics of different investments. The article suggests that good pension system design should be based on clear economic goals, such as income redistribution and ensuring adequate savings, and that investing in the stock market may shift risk within and between generations. The article also discusses specific issues related to developing markets, such as higher volatility and lower liquidity, and compares the demographic outlook and pension systems of East Asia and Latin America with those of industrialized countries.
Momentum strategy and institutional investing in the Taiwan stock market.
WANG, C. says that This article is focused on the predictability of stock return and the efficiency of the financial market. The author examines various studies that discuss the over-reaction and under-reaction phenomenon in the capital market, and how it affects market efficiency. The author also looks at different momentum strategies such as contrarian strategies, industry momentum strategies, and the 52-week high strategy. The article also highlights the increasing role of institutional investors in the Taiwanese stock market and their momentum strategies. The purpose of the article is to compare the performance differences between different momentum strategies and portfolios of institutional investors.
The Effects of Investing Social Security Funds in the Stock Market When Fixed Costs Prevent Some Households from Holding Stocks.
According to ABEL, A. B. What is the Social Security Trust Fund, and how does it relate to the future of the Social Security system in the United States?
The Social Security Trust Fund is a fund held by the US government that is used to finance the Social Security system. The fund is currently running a surplus of $100 billion per year, which is used to buy bonds that are held in the trust fund. The value of this trust fund is projected to grow to more than $2.3 trillion (1999 dollars) by the year 2015.
However, as the baby-boom generation retires and collects Social Security benefits, the trust fund will be drawn down until it is exhausted in the year 2034. Various policies could delay this date, including increasing payroll tax rates, increasing the retirement age, reducing benefits, or investing some of the trust funds in equity to earn a higher rate of return.
Investing part of the Social Security Trust Fund in equity is controversial, as some economists argue that it is simply a rearrangement of paper assets without any real allocational effects, while others argue that it could provide a higher rate of return and help to preserve the solvency of the Social Security system. The equity premium puzzle, which refers to the fact that the historical average equity premium greatly exceeds the equity premium that can be explained by conventional models, has attracted the attention of policymakers trying to preserve the solvency of the Social Security system.
.Applicability of American stock market anomalies to international investing.
STANLEY, D. J. says that The study suggests that the globalization of financial markets has led to similarities in behavior between major equity markets worldwide. Using classical Benjamin Graham market performance tendencies, the study found that simple valuation techniques resulted in superior long-term performance in the US and international equity markets, including Europe, Japan, and Europe/Japan. Low price to earnings, low price to normalized earnings, low price to book, and low price to cash flow quintiles outperformed the high quintiles in each respective category. The author concludes that these parallels were not due to investment cash flow by US institutional and individual investors.
Importance of Machine Learning in Making Investment Decisions in Stock Market.
PRASAD, A.; SEETHARAMAN says that This is a research paper on the application of machine learning algorithms in making investment decisions in the stock market. The paper discusses the evolution of trading strategies, from technical analysis to fundamental analysis and then to algorithmic trading. The authors argue that there is a need for research in the trading field to exploit the stock market and that artificial intelligence (AI) can be used to generate trading signals. The paper also discusses the biases inherent in machine learning models, and the research questions and objectives that guide the study. The research objectives are to gather machine learning research articles that focus on making investment decisions, to evaluate the performance of various machine learning algorithms, to check the variables considered important in training and testing algorithms, to understand the combination of feature variables that play important roles, and to diagnose the fitness of tests by computing root mean squared error (RMSE) and accuracy matrix. The scope of the study is to generate trading signals using machine learning algorithms, and the authors argue that because the stock market is dynamic, a developed strategy can soon become obsolete, hence the need for ongoing research.
Variable investment strategies for Chinese listed military enterprises: an empirical study based on double-market network analysis.
ZHOU, W. et al. say that This is an academic paper that aims to investigate the performance of Chinese military enterprises in both production and stock markets. The authors construct multiple double-market networks and corresponding models to evaluate the enterprises’ performances and provide investment strategies for investors to cope with the external uncertainty of military expenditure. The paper discusses the exogenous variables affecting military enterprises’ performance, including enterprise characteristics and the external environment. The authors argue that analyzing the exogenous impact of the enterprises’ performance requires taking into account their characteristics and external environment. The paper contributes to the literature by proposing a double-market network approach that allows for a comprehensive analysis of the enterprises’ performance in both markets.
The Impact of Financial Scams on Investor Behavior
BUDDARAJU, A.; DEVAIAH, P. R. says that The article discusses the importance of investing in the modern world and the factors that influence investors’ behavior when it comes to investment decisions. The authors highlight that investors are becoming more conscious about how they want to save and invest their money and want higher returns on their capital with limited risk. They also discuss the role of investments in increasing investors’ wealth and prosperity and the economy’s overall development. The article notes that various behavioral biases affect investors’ decision-making abilities, and investors need to consider these when selecting and evaluating the best investment. The article concludes by stating that Indians tend to invest in safe securities, such as bank deposits, pension schemes, post office schemes, and mutual funds, but show less interest in investing in equities and debentures.
STOCK BROKING FIRMS SIPHON OFF CLIENT SECURITIES.
KUMAR, A. S. Says that The article discusses the fraudulent pledging of client’s shares to raise loans done by VRise Securities, a brokerage house, which is under the scanner of the Securities and Exchange Board of India (SEBI). The article also mentions the past cases of Karvy Stock Broking Limited (KSBL) related to an IPO scam and cheating investors. It further discusses the scenario of Axis Bank, which moved to the Securities Appellate Tribunal (SAT) against SEBI’s order. The SAT granted interim relief to Axis Bank by directing the status quo to be maintained on the SEBI orders. The article also talks about the probes conducted by NSE and the Serious Fraud Investigation Office (SFIO) into the alleged financial irregularities of KSBL. The scandal has highlighted the fraudulent practices in the stock market and prompted banks to corrective actions in loans against shares.
Factors Influencing the Investment Behavior of Women Investors: An Empirical Investigation.
UPADHYAY, H says that The article discusses the importance of investment for individuals and economic development and the various investment avenues available such as savings accounts, fixed deposits, government securities, corporate bonds, insurance policies, real estate, commodities, shares, mutual funds, chit funds, and gold and silver. The article also highlights the role of individual investors in the stock market and the decision-making process based on the relationship between risk and return. The study focuses on analyzing the factors influencing the investment behavior of women investors and identifies personal factors, sociocultural factors, family factors, demographical factors, motivational factors, psychological factors, economic factors, and firm-related factors as major influencers. A literature review of several studies conducted in India is presented to support the analysis. The study aims to address two research questions: the relative importance of decision variables in selecting investment options and the identifiable constructs that women investors rely upon while making investment decisions.
Inflation, Stock Market Return, and Real Estate Sector: Evidence from Indian Economy.
UPADHYAY, H says that The present paper examines the association between inflation, capital market development, and the real estate sector in India. The study aims to find out whether the real estate sector can give returns that outperform inflation. As a proxy for the real estate sector, the Nifty reality index is considered in the study, which reflects companies engaged in construction and residence business in India. The study conducts a literature review of various research papers related to real estate investment, profitability, investment-based factor model, economic factors for equity and mortgage real estate, determinants of domestic and foreign real estate investment, investors’ expectations, and decision patterns in buying and selling of properties. The study uses time series of monthly data from January 2007 to January 2017 to identify the relationship between inflation, capital market return, and real estate return in both the long term and short term. The data is taken from the website of the National Stock Exchange of India and the Reserve Bank of India.
Conclusion:-
Growth and value investing are two different investment styles that focus on different types of companies. Growth investing is when an investor buys shares in companies that have high potential for growth in the future. These companies tend to have high earnings growth rates, high price-to-earnings ratios, and may not pay dividends. Growth companies are often in the technology, biotech, and healthcare sectors, as these industries are constantly evolving and developing new products and services.
On the other hand, value investing is when an investor buys shares in companies that are undervalued in the market, but have the potential for future growth. These companies tend to have low price-to-earnings ratios and low price-to-book ratios and may pay dividends. Value companies are often in mature industries such as banking, utilities, and retail, as they tend to have stable earnings and payout consistent dividends.
Overall, growth investing is focused on future growth potential and investing in companies that are expected to outperform the market, while value investing is focused on investing in undervalued companies that have the potential for future growth but may not have high growth rates in the short term.
Reference
SILVASTI, V.; GROBYS, K.; ÄIJÖ, J. Is smart beta investing profitable? evidence from the Nordic stock market. Applied Economics, [s. l.], v. 53, n. 16, p. 1826–1839, 2021. DOI 10.1080/00036846.2020.1853669. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=60b15fa2-b760-3e0d-b811-f487148ebbd9. Acesso em: 13 maio. 2023.
UCAS, D. Investing Public Pensions in the Stock Market: Implications for Risk Sharing, Capital Formation, and Public Policy in the Developed and Developing World. International Review of Finance, [s. l.], v. 2, n. 3, p. 179, 2001. DOI 10.1111/1468-2443.00024. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=8bac3e6d-355c-399c-9b93-3d7bcL350a199. Acesso em: 13 maio. 2023.
WANG, C.-P.; HUANG, H.-H.; LIN, W.-L. Momentum strategy and institutional investing in Taiwan stock market. Applied Financial Economics, [s. l.], v. 20, n. 21, p. 1651–1658, 2010. DOI 10.1080/09603107.2010.522517. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=e881b923-e778-3008-9c71-9af537335d1a. Acesso em: 13 maio. 2023.
ABEL, A. B. The Effects of Investing Social Security Funds in the Stock Market When Fixed Costs Prevent Some Households from Holding Stocks. American Economic Review, [s. l.], v. 91, n. 1, p. 128–148, 2001. DOI 10.1257/aer.91.1.128. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=fccb9958-11c4-33de-9207-a9c1e6e908dc. Acesso em: 13 maio. 2023
STANLEY, D. J. Applicability of American stock market anomalies to international investing. International Advances in Economic Research, [s. l.], v. 2, n. 3, p. 350, 1996. DOI 10.1007/BF02295264. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=e4ee07e3-4760-3f9a-bd9d-da65ddf01706. Acesso em: 13 maio. 2023.
PRASAD, A.; SEETHARAMAN, A. Importance of Machine Learning 00000000000000000000000000Journal for Decision Makers, [s. l.], v. 46, n. 4, p. 209–222, 2021. DOI 10.1177/02560909211059992. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=afa7dd03-30bf-34d5-b48e-2bfb525e0ae4. Acesso em: 13 maio. 2023.
ZHOU, W. et al. Variable investment strategies for Chinese listed military enterprises: an empirical study based on double-market network analysis. Applied Economics, [s. l.], v. 53, n. 40, p. 4646–4663, 2021. DOI 10.1080/00036846.2021.1907282. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=c31a5c16-dd9c-3eeb-874c-a3844353ab36. Acesso em: 13 maio. 2023.
BUDDARAJU, A.; DEVAIAH, P. R. The Impact of Financial Scams on Investor Behavior. IUP Journal of Financial Risk Management, [s. l.], v. 18, n. 1, p. 43–59, 2021. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=ae9aea9e-4e47-3608-bcb0-54d0500eec83. Acesso em: 13 maio. 2023.
KUMAR, A. S. Stock Broking Firms Siphons off Client Securities. Global Management Review, [s. l.], v. 14, n. 1, p. 1–7, 2020. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=48de6afb-28c8-3ceb-a711-14d75208f449. Acesso em: 13 maio. 2023.
KUMAR, S.; KUMAR, P. Factors Influencing the Investment Behavior of Women Investors: An Empirical Investigation. IUP Journal of Financial Risk Management, [s. l.], v. 16, n. 4, p. 30–50, 2019. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=719e3338-ca38-38e0-9297-c1bbbe4c9410. Acesso em: 13 maio. 2023.
UPADHYAY, H. Inflation, Stock Market Return and Real Estate Sector: Evidence from Indian Economy. IUP Journal of Financial Risk Management, [s. l.], v. 16, n. 3, p. 7–13, 2019. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=82b39c6f-2584-3304-bc0b-1a3a4cee186d. Aces.