Some unreliable history lessons
Article Abstract:
Investors are advised to continue with profitable investments and sell those that are making a loss, but this advice does not always hold, since good past performance does not mean that future performance will be good. Covariances between stocks are important when seeking to diversify, and past covariances are used to predict future covariances. Stock picking has not produced as good results as diversification in a sample portfolio for 3rd qtr 1998. The portfolio uses a simple strategy of buying stocks on Jun 30 and retaining them until Sep 30, and there are advantages in this approach.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Beautiful losers
Article Abstract:
Investors in stocks have to take risks if they are to make a profit. They can look for unpopular stocks in the hope that they rise in value, or go for very popular stocks. Reject stocks may be attractive in that they appear to represent a bargain. One investment tactic was developed by Michael O'Higgins, who saw a good way to achive high returns through buying the five stocks with the highest yields from the Dow Jones Industrial Average and retaining these stocks for 12 months.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1999
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: The unseen downside of stock market bonds. The beauty of bonds. The meaning of higher interest rates
- Abstracts: Booming U.S. economy drives 1999 holiday sales. Holiday season has retailers seeing green. Mass market driving photofinishing growth
- Abstracts: Searching for the right chemistry. Patent row kills merger