02-21-2005, 05:16 PM
I have just completed master's in finance .
Out of those, i'd go with #5, and i'd structure it like this
Talk about the efficient market hypothesis (EMH)... then break it down into short-term horizons vs. long-term horizons. the emh always holds for the long-term, but not always in the short-term. people who don't believe in the EMH generally invest with short-term horizons, believing that they will be able to accurately time their investments to beat the market, and profit.
For that bit, stock market timing, look for a paper written by robert h. jeffry called "the folly of stock market timing", written in the harvard business review (july-august 1984). it gives a detailed analysis of how that investment strategy rarely works, and when you look at the cumulative picture - all the returns are at or below the market's (i.e. the indices') returns.
I'd also say a little about the cost structure and risk in stocks vs. mutual funds vs. indices. Mutual funds sometimes have maintenance fees that neither stocks nor indices have - another incentive to put your money in the index.
just a couple ideas off the top of my head.
---------------------------------------------
If I could... Then I would... Turn back time!!
Out of those, i'd go with #5, and i'd structure it like this
Talk about the efficient market hypothesis (EMH)... then break it down into short-term horizons vs. long-term horizons. the emh always holds for the long-term, but not always in the short-term. people who don't believe in the EMH generally invest with short-term horizons, believing that they will be able to accurately time their investments to beat the market, and profit.
For that bit, stock market timing, look for a paper written by robert h. jeffry called "the folly of stock market timing", written in the harvard business review (july-august 1984). it gives a detailed analysis of how that investment strategy rarely works, and when you look at the cumulative picture - all the returns are at or below the market's (i.e. the indices') returns.
I'd also say a little about the cost structure and risk in stocks vs. mutual funds vs. indices. Mutual funds sometimes have maintenance fees that neither stocks nor indices have - another incentive to put your money in the index.
just a couple ideas off the top of my head.
---------------------------------------------
If I could... Then I would... Turn back time!!
