Op-ed Featuring Eller Research Picked-up by MarketWatch
July 10, 2020
An op-ed about long-term investments in the stock market, featuring research from Scott Cederburg, associate professor of finance at the Eller College of Management, and Aizhan Anarkulova ‘13 BA (Economics) ‘22 PhD (Finance), was picked up by MarketWatch on July 9.
The piece argues that “the ‘buy and hold’ mantra that is keeping investors’ hearts warm during these turbulent times may be dangerously flawed, and based on biased data and a misreading of stock market history.” According to research by Cederburg, Anarkulova and co-author Michael O’Doherty from the University of Missouri, investors who hold stocks for five years have a 30 percent chance of losing money, a 20 percent chance after 10 years and a 12 percent chance after 30 years.
“The three authors tapped the broadest database they could, looking at monthly returns for 39 developed countries going back to 1841, and measuring returns in the way that actually counts for ordinary investors—namely, in terms of real purchasing power,” reads the article. “Based on this much broader set of data, they estimate the risks of failure are much higher than most realize.”
Scott Cederburg joined the Eller College of Management in 2011 after earning his PhD in Business Administration (Finance) from the University of Iowa in 2011. Prior to academia, he was a senior financial analyst with Ethanol Capital Management and an investment analyst with Schwendiman Funds. A chartered financial analyst, Cederburg’s research interests include asset pricing, cross-sectional anomalies, long-run risk, asset allocation and applied Bayesian econometrics.