Investment Horizon

We consider investors who have very short investment horizon such as 6 months and 1 year and investors who have a intermediate horizon such as 3 years.

As we allow for one month investment delay, this means any investment strategy is implemented one month after winner or loser stocks are identified. Suppose at the end of October 2006, we identify a stock as a winner stock for a 3-year investment horizon. We buy the stock with a one-month delay, that is, we buy at the end of November 2006. Total shareholder return is measured for the 3-year period from December 2006 to the end of November 2009.

Various stock selection strategies are used to identify which stock to buy and which stock to avoid in various markets. Back-testing is used to test the profitability of any stock selection strategies. To see the results of stock selection strategy for various holding period, click here.