Asset class correlations refer to the degree to which the returns of different asset classes move in relation to each other. A high positive correlation indicates that two asset classes tend to move in the same direction, while a high negative correlation implies that they move in opposite directions. Understanding these correlations can help investors make informed […]
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Whether we like it or not, the technological advancement of generative AI has crossed a threshold from which there is no turning back. Since its release, ChatGPT’s usage have grown faster than any other consumer product in history, showing the insatiable demand for AI assistance. While in the pre-ChatGPT era we often thought of manual-based
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What is Sell in May and Go Away? An investment strategy based on the theory that the stock market underperforms in the six-month period between May and October – Sell in May and Go Away refers to a well-known adage in the business and financial world. Stock markets have previously underperformed in the six-month period
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You’ve probably heard investing professionals talk about risk-adjusted returns. This is a way of measuring the performance of an investment that factors in risk—specifically, the extra risk required to get higher returns. The Sharpe ratio is a way to measure the risk-adjusted returns of your investments. What Is the Sharpe Ratio? Investments can be evaluated
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The Sharpe ratio is a well-known and well-reputed measure of risk-adjusted return on an investment or portfolio. It was developed by the economist William Sharpe. The Sharpe ratio can be used to evaluate the total performance of an aggregate investment portfolio or the performance of an individual stock. The Sharpe ratio indicates how well an equity investment
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The January Effect is an investing theory that suggests that the performance of the stock market in the month of January can be used to predict the performance of the stock market for the rest of the year. According to the theory – first posited by Yale Hirsch in 1972 – if the stock market
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What is Backtesting? Backtesting involves applying a strategy or predictive model to historical data to determine its accuracy. It can be used to test and compare the viability of trading strategies so traders can employ and tweak successful strategies. Summary How Backtesting Works Analysts use backtesting as a way to test and compare various trading techniques
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Moving averages are one of the most used tools in stock trading. Many traders actually use only this tool in their investment toolbox. Let’s see what they are. What is a moving average? In a time series, a moving average of period N at a certain time t, is the mean value of the N values before t (included). It’s defined for each
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Share markets have endured a tumultuous start to the year, with the war in Ukraine, lockdowns in China and inflation anxieties relegating COVID-19 news flow to the back pages. In this environment, timing when markets will reach their nadir becomes notoriously difficult to achieve and we implore investors to overcome the temptation to make hasty
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As many investors have discovered over the last 6 months – you can lose A LOT! SUMMARY Bonds are typically considered safe investments However, there were decades of negative real returns Drawdowns reached 50% for U.S. Treasuries and Bonds INTRODUCTION Inflation greater than 10% was unknown for the majority of people in developed markets before
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