Strategies for stock portfolio analysis, construction and management

Multiple studies have outlined the superior return of shares in the long-run in comparison with other asset classes such as bonds and derivatives (Hayes, 2020). But are there certain characteristics of shares that drive to higher investment returns? The aim of this research is to study how shares can be valuated, and if there are certain investment strategies which have proved to lead to higher-than-average returns in the past. To do so, a wide number of studies that show the relation between specific share characteristics and investment returns have been analyzed. The objective is to define through empirical evidence, a set of investment features that in the past have systematically led to higher returns on investments. These different approaches to stock portfolio analysis and construction ultimately describe the key bases of value investing, and the characteristics an investor should look for when trying to spot an undervalued firm inside a highly competitive and ever evolving market.