Style investing

Style investing

As opposed to investing in individual securities and bonds, investors can decide to make portfolio allocation decisions by placing their savings in broad categories of securities, such as "large-cap", "growth", "international", or "emerging markets". This approach to investing is termed style investing.

Style investing is of interest to economists because it serves as a useful framework for identifying anomalous price movements in stocks, such as those observed when a stock is added or removed from the S&P 500 index.

References

* Barberis, Nicholas and Shleifer, Andrei, Style Investing, 2003, J. Financial Econ., 68, 161-199.


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