Research links: zero-sum propositions
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Recent academic research on financial decision-making highlights the importance of probabilistic thinking and disciplined behavior. In a world of market frictions, financial language models are being developed as artificial intelligence systems to aid in news-based trading. Skewness, a measure of asymmetry in the distribution of returns, appears to have a more significant impact on investment outcomes than initially thought.
Historically, the U.S. stock market has outperformed other global markets, while corporate bond premiums have remained consistent. Retail investors tend to rely on the advice of family and friends for their investment decisions. European investors are increasing their exposure to equity markets.
Quantitative firms and artificial intelligence companies are competing for the same talent pool of recent college graduates. A recent study suggests that financial language models can be applied to news-based trading strategies under market frictions. Another research piece explores what happens after periods of high dispersion and low correlation in financial markets.
The volatility of private credit has been questioned, and if it is indeed understated, the magnitude of the underestimation could be significant. The definition of risk has evolved over time, and markets pay attention when companies disclose changes in their tax rates, even within the realm of the stock market.
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