Finance Panel

The Clark Center for Global Markets explores finance professors’ views on vital policy issues via our Finance Panel.  We regularly poll over 40 individuals on a range of timely and relevant topics.  Panelists not only have the opportunity to respond to a poll’s statements, but an opportunity to comment and provide additional resources, if they wish. The Clark Center then shares the results with the public in a straightforward and concise format.

Please note that from September 2022, the language in our polls will use just two modifiers to refer to the size of an effect:

  • ‘Substantial’: when an effect is large enough that it would make a difference that matters for the behavior involved.
  • ‘Measurable’: when the direction of the effect is clear, but perhaps experts would differ as to whether it is substantial.
Finance

Stock Market Investing

Question A:

In general, absent any proprietary information, a retail equity investor cannot consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day.

Question B:

In general, absent any proprietary information, a retail equity investor can expect to do better by holding a well-diversified, low-fee, passive index fund than by holding a few stocks.

 
Finance

Sovereign Wealth Funds

Question A:

Establishing a sovereign wealth fund to invest in domestic infrastructure, emerging technologies, and/or strategic sectors would bring substantial benefits to the US economy over a ten-year horizon.

Question B:

For the US, establishing a sovereign wealth fund would be substantially better for citizens relative to reducing public debt burdens.

 
Finance

Cryptocurrency

This Finance survey examines (a) A bitcoin's value derives from the belief that others will want to use it, which implies that its purchasing power is likely to fluctuate over time to a degree that will limit its usefulness; b) A substantial source of the value of unbacked decentralized private cryptocurrencies, such as Bitcoin, arises from their convenience for use in illegal activities; c) A properly diversified portfolio should include crypto assets 
Finance

Trends in Banking

This Finance survey examines (a) The trend of consolidation in the US banking sector will lead to fewer, but more profitable, mega-banks with over $250 billion in assets dominating the market; (b) The current liquidity and capital regulations are inadequate to address run risks of banks in a digital era 
Finance

ESG, Shareholders, and Regulation

This Finance survey examines (a) Concerns about the environmental impact of companies are substantially better resolved by shareholder activism towards management than by regulations or government intervention; (b) Concerns about diversity, equality and inclusion within companies are substantially better resolved by shareholder activism towards management than by regulations or government intervention 
Finance

Private Credit

This Finance survey examines (a) The large increase in the market for private credit as a substitute for bank finance substantially reduces systemic risk; (b) The growth in private credit is substantially higher because of regulations that disincentivize banks from lending to below investment grade private businesses

  
Finance

Abnormal Returns and Active Portfolio Management

This Finance survey examines: It is appropriate advice for retail investors to tilt their portfolio away from the market portfolio towards factors that have been identified in the academic literature to earn positive abnormal returns relative to the Capital Asset Pricing Model 
Finance

Effects of End-of-Day Trading

In this Finance survey: Stock markets around the world have seen an increasing concentration of trades in or near the closing auction. In the US, for example, about a third of all S&P 500 stock trades are now executed in the final ten minutes of the session, up from 27% in 2021 (a) The increased concentration of trading in the final minutes of the trading day has a measurably detrimental effect on market quality; (b) Strict indexing implemented with trading at the close to avoid tracking error creates a measurable performance drag that could be avoided with more flexible passive strategies 
Finance

Corporate Social Responsibility

This Finance survey examines (a) Public companies that pursue social and environmental initiatives bear no measurable costs (in terms of lower profits) relative to similar companies that do not pursue such initiatives; (b) Public companies that pursue social and environmental initiatives benefit from a measurably lower cost of capital than similar companies that do not pursue such initiatives; (c) There are substantial social benefits when managers of public companies make choices that account for the impact of their decisions on customers, employees, and community members beyond the effects on shareholders 
Finance

Publicly Traded Firms, Private Firms and the Economy

This Finance survey examines (a) The lower willingness of private firms to go public, combined with the increased number of publicly traded firms being taken private over the last 25 years, is measurably net negative for economic growth; (b) All else equal, reducing regulatory barriers (including reporting requirements such as Sarbanes Oxley 404) to public listing would substantially increase the share of publicly traded firms in the economy; (c) The lack of transparency about unlisted private firms' financial performance substantially hinders the efficiency of the allocation of capital