Can investors gain from investing in certain sectors?

Paresh Kumar Narayan, Huson Ali Ahmed, Seema Narayan

Research output: Contribution to journalArticleResearchpeer-review

10 Citations (Scopus)

Abstract

In this paper, we analyse investor behaviour on the NYSE. We show that average returns from dynamic trading strategies, regardless of the different portfolio constraints, out-perform passive trading strategies in all sectors. In addition, the performance of dynamic strategies is much more impressive in some sectors than in others. We also undertake a profitability and safety analysis based on a portfolio of high-performing sectors and show that at higher levels of expected returns, a rise in profitability comes at the expense of less safety. Our results, on the whole, reveal that investors’ can gain substantially by investing in certain sectors.

Original languageEnglish
Pages (from-to)160-177
Number of pages18
JournalJournal of International Financial Markets, Institutions and Money
Volume48
DOIs
Publication statusPublished - May 2017
Externally publishedYes

Keywords

  • Dynamic trading strategies
  • Mean-variance
  • Portfolio
  • Profitability
  • Sectors

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