This study examines whether the application of an accounting fundamental strategy to select stocks of a portfolio can systematically yield significant and positive excess market buy-and-hold returns after one year of portfolio formation
2018
Key concepts
Scholarcy highlights
- This study examines whether the application of an accounting fundamental strategy to select stocks of a portfolio can systematically yield significant and positive excess market buy-and-hold returns after one year of portfolio formation
- The study found that eleven accounting ratios predict stocked returns accurately in 76.6% cases
- This robust ability to accurately predict stock returns is evidence that conducting fundamental analysis and taking investment positions on the basis of Pr values can be a fruitful strategy for investors in Nigeria
- The study recommends that investors evaluate their investments in equity for 12 months before making a buy or sell decision using a Pr strategy to avoid loses or missing opportunities
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