Investment Research from John Rothe, CMT

Behavioral Finance: Understanding the Psychology Behind Investment Decisions

Behavioral Finance: Understanding the Psychology Behind Investment Decisions

Behavioral finance is the study of how psychological factors affect financial decisions and, by extension, financial markets. It seeks to explain why individuals often make irrational financial choices that deviate from what traditional economic theories would predict. The field challenges the notion that markets are always efficient and that investors always act rationally to maximize their wealth.

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Understanding and Utilizing the Ulcer Index in Investment Strategies

Understanding and Utilizing the Ulcer Index in Investment Strategies

When constructing an investment model, risk management is a critical aspect of portfolio construction and performance evaluation.

While traditional measures like standard deviation and variance have been a favorite risk gauge by many investors, the Ulcer Index (UI) — a less conventional but highly insightful metric — offers a unique perspective by focusing specifically on downside risk.

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Is Gold a Good Hedge Against Inflation?

Is Gold a Good Hedge Against Inflation?

Is Gold a Good Hedge Against Inflation? Gold has historically been viewed as a reliable store of value and a hedge against inflation. Throughout time, investors have turned to gold during economic upheavals, political unrest, and times of inflation. But how accurate is this belief? Is gold genuinely a good inflation hedge?

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The Problem with Modern Portfolio Theory

The Problem with Modern Portfolio Theory

The Problem with Modern Portfolio Theory: The world of finance is replete with theories and models. Yet, few concepts have left as indelible a mark as Modern Portfolio Theory (MPT). Proposed by Harry Markowitz in his 1952 paper, “Portfolio Selection,” MPT has been both a guiding light and a point of contention among investors for decades.

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John Rothe

John Rothe CMT is the Founder and Chief Investment Officer of Riverbend Investment Management