Alpha Architect

Financial crime is often treated as a matter of enforcement. People break rules, courts prosecute, and regulators respond. But in reality, financial crime can also reflect financial pressure. Some individuals face weak balance sheets, poor debt management and limited savings, and stronger incentives to misuse money placed in their trust. This paper introduces a new perspectiv...

Evidence-based investors have long debated the efficient market hypothesis (EMH), popularized by Gene Fama. In the new era of social media echo chambers, meme stocks, and information overload, it has become fashionable to argue that markets are growing less rational. BlackRock’s William Ezratty, Gerald Garvey, Timothy McDade, and Andrew Robinson, authors of the study “

As I’m writing this, the largest IPO in history is underway. SpaceX, which targeted a $135 IPO price, closed above $160 in its first trading day, making Elon Musk the world’s first trillionaire and SpaceX the sixth largest public company in the world. Talk about a rocket ship!

But something makes this IPO truly special: the huge amount of retail participation. To pu...

Forecast bias is often treated as an abstract behavioral trait. Investors observe data, form expectations, and make decisions. But in reality, these biases shape real trades. Some investors extrapolate from recent performance. Others react in the opposite direction, and these differences affect which stocks they buy, which stocks they sell, and how they move money into equiti...

Asset pricing research often focuses on risk, valuation, and macroeconomic forces. But this paper highlights another surprisingly powerful driver of returns: the timing of dividend payments. Across 44 international equity markets, the authors uncover a large and persistent “dividend premium.” Dividend-paying stocks outperform non-payers by a meaningful margin, even after cont...