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Can investors gain from investing in certain sectors?

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  • Narayan, Paresh Kumar
  • Ahmed, Huson Ali
  • Narayan, Seema

Abstract

In this paper, we analyse investor behaviour on the NYSE. We show that average returns from dynamic trading strategies, regardless of the different portfolio constraints, out-perform passive trading strategies in all sectors. In addition, the performance of dynamic strategies is much more impressive in some sectors than in others. We also undertake a profitability and safety analysis based on a portfolio of high-performing sectors and show that at higher levels of expected returns, a rise in profitability comes at the expense of less safety. Our results, on the whole, reveal that investors’ can gain substantially by investing in certain sectors.

Suggested Citation

  • Narayan, Paresh Kumar & Ahmed, Huson Ali & Narayan, Seema, 2017. "Can investors gain from investing in certain sectors?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 48(C), pages 160-177.
    • Handle: RePEc:eee:intfin:v:48:y:2017:i:c:p:160-177
    DOI: 10.1016/j.intfin.2017.01.003
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    10. Zhifeng Dai & Haoyang Zhu & Xiaoming Chang & Fenghua Wen, 2025. "Forecasting stock returns: the role of VIX-based upper and lower shadow of Japanese candlestick," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-35, December.
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