This post will introduce one way of forecasting the stock index returns on the US market. Typically, single measures such as CAPE have been used to do this, but they lack accuracy compared to using many variables and can also have different relationships with returns on different markets. Furthermore, it ...

This post will introduce one way of forecasting the stock index returns on the US market. Typically, single measures such as CAPE have been used to do this, but they lack accuracy compared to using many variables and can also have different relationshi...

If you have ever seen comparisons of investment returns with and without reinvested dividends, you know that the difference gets huge as the investment horizon increases. Wouldn't it be great you could achieve a similar increase in returns by altering your investment style? Small cap value stocks have historically achieved ...

The S&P 500 is officially in a bear market, and the crash from the high valuation levels has been fast and painful. There is however light at the end of the tunnel. In this post I'll demonstrate how the US stock market has developed during past bear markets and how ...

Making accurate predictions using the vast amount of data produced by the stock markets and the economy itself is difficult. In this post we will examine the performance of five different machine learning models and predict the future ten-year returns for the S&P 500 using state of the art libraries ...

Making accurate predictions using the vast amount of data produced by the stock markets and the economy itself is difficult. In this post we will examine the performance of five different machine learning models and predict the future ten-year returns ...

In this post I'll introduce a simple investing strategy that is well diversified and has been shown to work across different markets. In short, buying cheap and uptrending stocks has historically led to notably higher returns. The strategy is a combination of these two different investment styles, value and momentum. ...

Time is the investor's best friend. The longer the investment horizon, the less the investment returns depend on factors such as crashes and current valuation levels. It is known that the chance for losing in the stock market on a 20-year period has historically been about zero. This post attempts ...

In this post we'll test three different cyclically-adjusted valuation measures: CAPE (earnings), CAPD (dividends) and CAPB (book value). CAPE is calculated like the P/E ratio, but by dividing the current real price with the last ten year's average inflation-adjusted earnings. CAPD uses dividends instead of earnings, and CAPB uses ...

Mean reversion is the assumption that things tend to revert back to their means in the long run. This is especially true for valuations and certain macroeconomic variables, but not so much for stock prices themselves. In this post we'll look at the mean reversion of different valuation measures by ...

Self-organizing maps are an unsupervised learning approach for visualizing multi-dimensional data in a two-dimensional plane. They are great for clustering and finding out correlations in the data. In this post we apply self-organizing maps on historical US stock market data to find out interesting correlations and clusters. We'll use data ...

In this post we'll look at the odds of a stock market crash from the view point of valuation. We'll use my favorite valuation measure Shiller P/E or CAPE ratio, which is just like regular P/E except it's calculated by using earnings of the last ten yea...