Consumers in China are taking to social media to express their support for Huawei as the U.S. government looks to ramp up pressure on the Chinese smartphone maker.Technologyread more
U.S. President Donald Trump's latest tariff increase — and Beijing's plans to counter them — are hitting U.S. companies in China, according to a joint survey this month by...China Economyread more
"We are also constantly watching whether the trade war will turn into a tech war," Ma said Tuesday, according to a CNBC translation of his Chinese remarks published by a locak...China Economyread more
Kohl's, J.C. Penney and Nordstrom release disappointing earnings news, putting a damper on their sector.Retailread more
Bezos's comments give a rare glimpse into his interest in the auto industry. Amazon recently invested in two self-driving start-ups.Technologyread more
While investing often seems like a contrarian game where going against the flow feels like the better bet, the reality is that investors who bought the most-favored stocks...Hedge Fundsread more
The economist thinks the Fed ought to pay more attention to financial markets when setting interest rates.The Fedread more
Talks between the world's two largest economies have stalled after each nation lobbied higher tariffs on the other's imports.Traderead more
"Pretty much the entire suite of apps that 'talk' over the internet could be vulnerable," said Tom Uren, a senior analyst at the Australian Strategic Policy Institute's...Cybersecurityread more
A Chinese official in Hong Kong is urging the quick passage of legal measures to allow fugitives to be transferred to the mainland.China Politicsread more
GAC Motor said its delaying its launch in the U.S. but had no timeline when it could launch there.Autosread more
Last year's laggards might be this year's leaders.
This is what investors hope for when they pick up battered stocks in the beginning of a given year. And as it turns out, it's a long-term winning strategy that has been beating the markets for 30 years.
According to AB Bernstein, buying the stocks that were in the bottom one-third of performers in the S&P 500 during the previous 12 months at the start of the year and screening out the value traps, a term for cheap stocks that never recover to fair value, has produced average annual relative returns of 2.6 percent since 1985.
Bernstein calls this the "enhanced laggard" model, and it has been a winning strategy over the last 10-, 20- and 30-year periods compared to other strategies.
For example, it "would have been a better strategy than the traditional 'Dogs of the Dow' method," Bernstein's Ann Larson said in a note to clients on Thursday.
'Dogs of the Dow' is a simple value investing strategy that calls for buying the 10 stocks with the highest dividend yield in the Dow Jones Industrial Average and holding them for a year. It has outperformed the markets for the past four years straight. The dogs kept investors relatively safe last year, with a flat return of 0.024 percent for the period versus the Dow's nearly 6 percent decline and the S&P 500′s 6.2 percent.
However, buying laggards didn't work last year, when the stock market suffered its worst year since the financial crisis. Bernstein's "enhanced laggards" strategy posted a 6.6 percent decline, similar to the S&P 500's performance. Owning leaders, or the top performers in the previous year, was the winning strategy last year, returning 1.4 percent, though over the 30-year time frame it has been less successful than buying the "enhanced laggards."