Momentum Strategies

Abstract As time went by, the or so touristed investing instruments atomic number 18 buy in and alliance（ex. Corporate bond、 G everywherenment exchequer Bond、 exchequer bills）. also that, those instruments are more acquainted(predicate) by most investors. Because of these reasons, on that point are many kinds of investment strategies that be invented in the stock market. For example, contrarian strategies and impetus strategies are the most familiar strategies that we know. DeBondt and Thaler(1985,1987) proposed that stock prices also overreact to information and suggesting that contrarian strategies to strive abnormal harvest. That means corrupt losers and deal winners. Jegadeesh and Titman(1993) provided impulsion strategies to reach out abnormal retort in the stock market. They apply 16 different methods of momentum strategies to test if these methods could get abnormal return. They buy stocks with juicy returns over the preceding (prenominal) 3 to 12 months and sell stocks with unworthy returns over the same period. We could find that the investors could get laid-back returns in the attached 3 to 6 months if the stocks were choose with high returns over the previous 3 to 6 months. In contrast, if the instruction execution of stocks were poor in the past, these stocks may more worse in the future.

Besides that, the result of Titmans paper shows that the return of short-selling is much visit than the return of buy strategies. In most cases, the return of short-selling is forbid for investors. In addition, Balvers(2001) used the same metho d that Jegadeesh(1993) has eer used to anal! ysis, and the difference is the sample period. However, the results are similar to Jegadeeshs conclusions. Whether momentum strategies are useful in short-selling stocks, we would like to cover these issues in this paper. What kinds of relationship between contrarian strategies and momentum strategies? Kaul and Nimalendran(1990), Jegadeesh and Titman(1995) tried to justify the regression of stock market through bid-ask spread, but the...If you indirect entreat to get a full essay, order it on our website: BestEssayCheap.com

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