Strategy Change and Wealth Accumulation: An Analysis of S&P 500 Data
Weihong Huang and
Yu Zhang ()
Additional contact information
Weihong Huang: Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332
No 1502, Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre
This paper studies investors' strategy change frequency and their wealth accumulation by financial investments. Artificial investors are put into a real stock market. They trade S&P 500 following common strategies in practice. Fundamental analysis generally surpasses technical analysis in all market situa- tions except boom periods. Though investors' strategy change behavior, which is driven by the past performance of strategies, seems reasonable, a faster strat- egy change does not guarantee a higher final wealth. Active strategy change hurts investor' wealth in bear markets and in markets with major trend rever- sals. In bull markets, both fast and slow strategy change behaviors work better than a moderate speed of strategy change. A detailed decomposition of wealth accumulation via financial investment shows the dependence of wealth on in- vestors' past transactions. This may explain the relation between investors' strategy change frequency and their wealth.
Keywords: Financial Investment Strategy; Strategy Change Frequency; Wealth Accumulation; Standard & Poor's 500 (search for similar items in EconPapers)
JEL-codes: C63 G19 (search for similar items in EconPapers)
Pages: 21 pages
New Economics Papers: this item is included in nep-fmk and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nan:wpaper:1502
Access Statistics for this paper
More papers in Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre Contact information at EDIRC.
Bibliographic data for series maintained by Magdalene Lim ().