5 Stock Factors Academic Say Beat the Market (How is my stock strategy doing?)

The process of developing a reasonable stock investing method/strategy takes some time and a little luck. While there is a bit of trial and error there is also some research and reading involved. My little experiment includes using research and personal knowledge to create a stock investment strategy. I'm also using smaller investments to see if I can get a whole portfolio to beat out the market and more seasoned investors. 

You may want to read the working paper below. Out of 46 factors academics studied, only 5 factors had predictive promise of which buy and hold seemed to be the best. A few other factors with weaker predictability are  Fourth-Quarter Growth Rate in Personal Consumption Expenditures (gpce), Aggregate Accruals (accru), Credit Standards (crdstd), The Investment Capital Ratio (i/k), Treasury-bill Rates (tbl).

We won’t call it debunking, but not all investing tips hold up

My Working Strategy Not Finished: I will keep adjusting and tweaking until I get something good. 

1. Find a range of value to look at in terms of stock price. I'm looking at lower priced stocks that have room to grow. Low-Risk Anomaly 

2. Use current and future market trend projections to determine whether they fit in an upward swing. Look around for industry reports.

3. Diversify among multiple stocks in different industries versus a single type of stock to protect the whole portfolio. Investing in multiple industries.

4. Look for stocks that hedge each other. When stocks are declining in some arenas, they may grow in others. Watch how they counter each other. 

5. Buy and hold if in alignment with market trend. A few other weaker predictors include Fourth-Quarter Growth Rate in Personal Consumption Expenditures (gpce), Aggregate Accruals (accru), Credit Standards (crdstd), The Investment Capital Ratio (i/k), Treasury-bill Rates (tbl) 46 Stock Strategies. Thus if you want to delve more into the stats these may work.  

6. Undefined...still thinking about it. That is as far as I got. :) To be continued.....

May 9th, 24 -8% with poor performer outlier and 9% stripped out.

May 16th, 2024 I had a poor performing stock that was sitting in the abandoned account so I just sold it to clean it out so all stocks are newer as related to when I started formulating a strategy. My growth is 7.9%. That doesn't include the 3.4% current inflation rate. Its still a little under the average Average Stock Market Return 2024

*This is not stock advice at all. Go talk to your advisor. Its just an exploration of a topic.