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Stocks have been very fast growing in recent decades in most countries. Investing in the stock market is the best way to achieve ones financial goals, however, people are facing difficult choices on how to pick which stocks to invest in. That’s why stock portfolios should be professionally managed to provide low risk, diversified yields.The aim of this research is to examine the timing and selection processes of Chinese stocks using the TM method:(Treynor and Mazuy: 1966). This traditional, unconditional model uses a sample of 69 stocks from the real estate industry for a 10 calendar year period from January 1, 2004 to December 31, 2013. The TM model was used overall to estimate the total effectiveness of both the timing and selection processes for all 69 stock performances.The results of this study revealed that Chinese stock investors do not have the successful ability to time the market and 50 out of67 stocks, or 74.63% of the studied stocks, produced an excess asset return of no more than 0. Therefore, almost all of the stocks in the study did worse in the current bull market than in a bear market!
Stocks have been very fast growing in recent decades in most countries. Investing in the stock market is the best way to achieve ones financial goals, however, people are facing difficult choices on how to pick which stocks to invest in. That’s why stock portfolios should The aim of this research is to examine the timing and selection processes of Chinese stocks using the TM method: (Treynor and Mazuy: 1966). This traditional, unconditional model uses a sample of 69 stocks from the real estate industry for a 10 calendar year period from January 1, 2004 to December 31, 2013. The TM model was used overall to estimate the total effectiveness of both the timing and selection processes for all 69 stock performances.The results of this study revealed that Chinese stock investors do not have the successful ability to time the market and 50 out of 67 stocks, or 74.63% of the washed stocks, produced an excess asset return of no mo re than 0. Therefore, almost all of the stocks in the study did worse in the current bull market than in a bear market!