Investment Research from John Rothe, CMT

Examination of various types of sector rotation strategies, from economic cycle-based to event-driven. Detailed analysis of academic research, providing evidence-based insights into the effectiveness of sector rotation.

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.

The 10-Year vs. 2-Year Treasury Bond Spread, known as the “10-2 spread”, has emerged as a focal point for policymakers, investors, and market watchers. But what makes this spread so significant? Can it really be a trusted herald of impending recessions?

If you’re looking to unlock valuable insights into market trends and make more informed trading decisions, then understanding Fibonacci retracement levels is essential. Originating from the genius mind of Leonardo of Pisa, these levels hold a special place in the world of technical analysis.

The latest job report shows a notable slowdown in U.S. job growth, with employers adding 187,000 jobs in July, slightly below economists’ forecast of 200,000 positions. However, there’s no need to worry as this indicates a shift towards a more sustainable pace, which still exceeds the pre-pandemic monthly average. Additionally, the July figure is slightly higher than June’s revised payroll gain of 185,000. In this article, we’ll explore what this means for the economy and the implications for investment decisions.

The Big Mac Index is an intriguing economic indicator that offers a unique perspective on the world’s currencies and purchasing power parity (PPP). Created by The Economist in 1986, it has since gained significant recognition as a tool for illustrating currency value comparisons.

Value at Risk (VaR) is a powerful tool in modern risk management. As a statistic, VaR accurately predicts the maximum potential losses within a defined time frame. This invaluable metric is widely embraced by financial institutions and commercial banks for investment analysis. With VaR, one can gauge the magnitude and probabilities of potential portfolio losses effectively. Risk managers rely on VaR to measure and maintain optimal risk exposure levels.

Understanding the different types of momentum indicators, such as the MACD, RSI, Stochastics and On-Balance Volume (OBV), can help investors increase their trading success rate. This article examines the various indicators and provides examples.

Momentum investing research has proven momentum strategies that involve purchasing stocks or other securities that have demonstrated high returns over the past three to twelve months while selling those that have had low returns.

This tactic has been leveraged by both professional investors and individual traders for many years, consistently outperforming the stock market. In this article, we will delve into the world of momentum investing research, exploring what it is, how it operates, and why it has been so successful.