Talmud and Markowitz Diversification Strategies: Evidence from the Nigerian Stock Market

Prince C Nwakanma and Monday Aberiate Gbanador

Accounting and Finance Research, 2014, vol. 3, issue 2, 145

Abstract: The object of this study is to investigate Talmud and Markowitz diversification strategies using stocks quoted on the Nigerian Stock Exchange. The essence is to determine how each of these strategies compare with one another in terms of generating superior performance based on maximizing returns and minimizing risks. In addition, it examines the applicability of diversification to the Nigerian stock exchange regarding risk reduction and return maximization. This involved data on quarterly closing prices of 17 assets (companies) drawn from the Nigerian stock exchange for 17 years, equivalent to 68 periods. The three hypotheses formulated in the course of this study were tested using the difference between independent sample means (t – test). The null hypotheses of the three hypotheses were accepted. By implication this means that diversification can diversify away a reasonable amount of risk. Hence we recommend that Nigerian investors should apply Talmud diversification strategy since diversification is applicable to the Nigerian stock market. We further recommend that more sophisticated investors could still adopt Markowitz strategy since they possess the skills to do so. Investors should exercise caution by seeking the opinion of experts before committing their funds in the market.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.sciedupress.com/journal/index.php/afr/article/download/4786/2848 (application/pdf)
https://www.sciedupress.com/journal/index.php/afr/article/view/4786 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:afr111:v:3:y:2014:i:2:p:145

Access Statistics for this article

More articles in Accounting and Finance Research from Sciedu Press Contact information at EDIRC.
Bibliographic data for series maintained by Sciedu Press ().