Using the Student Investment Fund at Claremont McKenna College as a proxy for inexperienced investors, I demonstrate that inexperienced investors using fundamental analysis produce momentum-like buying patterns. The results show that the Student Investment Fund is on average buying stocks that outperform Carhart’s four-factor asset pricing model in the year before purchase. As a result, the Student Investment Fund has, on average, underperformed the S&P500 by .48% per year since 1996. My thesis explores why the Student Investment Fund may have adopted momentum-like purchasing patterns and what steps can be taken to remedy it.
| Identifer | oai:union.ndltd.org:CLAREMONT/oai:scholarship.claremont.edu:cmc_theses-2548 |
| Date | 01 January 2017 |
| Creators | Lillie, Nicholas J |
| Publisher | Scholarship @ Claremont |
| Source Sets | Claremont Colleges |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | CMC Senior Theses |
| Rights | © 2016 Nicholas J Lillie, default |
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