Effect Size: a measure of the strength of a relationship between variables. In domains heavily concentrated in statistics and econometrics such as financial economics, we often need to know the impact a variable has on another variable; or we may need to know the impact a group of variables has…

The Social Security Act of 1935 was signed into law by President Franklin Roosevelt, and like all governmental implementations, the Act was couched as “good,” something every good Republic should offer its people. The Act was positioned as a safeguard against poverty for older persons. Of course, like taxation, the…

RISK encompasses our daily lives; it follows us. Risk lies in wait with every activity we partake. We drive to work. Risk. We ride the elevator. Risk. We work with people. Risk. We walk onto the operations floor. Risk. We make operational decisions. Risk. We make financial decisions. Risk. We…

The US economy has struggled under the Biden Administration. Likewise, the market has struggled. In fact, most “experts” from large investment banks and firms have regularly claimed the market would fall to levels not seen in decades, with some claiming the market was outright doomed; such continues to this day….

Groupthink, a behavioral phenomenon occurring within a group of individuals whereby consensus is reached collectively by avoiding controversial constructs. While the theory is nothing new, scientific validity has yet to be fully developed and accepted by scientific researchers working within the various areas of behavioral science, let alone the educated…

A publication of Xicon Economics, LLC, developed specifically for its clients and investors that sheds insights into financial economics as it relates to its investments and the US market.

If it were not such a serious topic, it would be almost laughable at the sheer volume of investment experts these days.  For many, the ink has yet to dry on their diplomas, if they earned one, yet they hail themselves as a financial genius, a mastermind of wisdom beyond…

“Once again, our prediction has held. The 2021 model Xicon Economics developed demonstrated strong statistical evidence that the market would drop to 3,650 in 2022, stabilize, then begin its return toward a slow recovery.” – Herbert M Barber, Jr, PhD, PhD

Relative Strength Index (RSI) serves as a measure of price stability within an equity, and though not being an outright measure of risk, RSI can be helpful for some investors. When RSI decreases, “risk” decreases, and when RSI increases, “risk” increases, at least in the traditional sense of risk. Given…

We used vector autoregression followed by Monte Carlo simulation as a means of modeling equity pricing data, then back-tested our findings against known pricing. We selected LLY as our stock for both methods and used pricing data from December 2015 through November 2020. In fairness, there were no specific criteria…

The market is considered by many as one of the chief indicators of US economic stability. Whether the market indeed serves as a good indicator of such is usually left to those with more time to think and less time to do, but in today’s state of turmoil, society certainly…

Precious metals have long been considered sound investment alternatives for many investors, with gold being held as the most popular. The most touted claim by large brokerage firms is that precious metals are strong hedges against inflation, but as we have proven on numerous occasions, such is not true, especially…

Time series analysis is an econometric technique economists, researchers, and other analysts use to model and subsequently forecast data, or moreover, other times series, where times are discrete (t=1,2,3…n) or continuous (t>0). It is most useful on large data sets, and consists of three primary components, including seasonality, trend, and…

Above all other questions we receive, the most frequent question involves our expectations of the market. Of course, you would have to pry all we know from our cold hands. While we may not always know exactly where the market is headed, we are nearly always very close. Even then,…

In financial economics, we face uncertainty every day, but rather than being fearful of risk, we leverage risk to our advantage to increase financial output. We do so through a host of methods and techniques in various analytical mixes as we solve complex problems, such as knowing exactly which assets…

With no argument, the US has spiraled to new lows politically, economically, and socially the last several years. With any glimmer of hope of having a sound leader politically, economically, and socially the next few years gone, the US faces issues we may never resolve, let alone overcome. Consider where…

Volatility within the discipline of financial economics is a fundamental measure of statistics describing dispersion in the returns of given assets, indexes, or similar sets of data, while dispersion is a measure that notes the extent to which data vary about the mean. To some degree, dispersion notes stability within…

Beta and Sharpe ratio are two of the most fundamental expressions in investment economics, but so few seem to really understand them, and even fewer can calculate them. In a statistical sense, beta, or beta coefficient, as it is technically, is found in regression analysis. Regression assumes three constructs, including…

Hedge funds were developed in the late 1940s as a means of giving financially savvy investors more control over their investments by allowing them to leverage pooled funds through a limited partnership that gages risk against growth in an attempt of reducing losses. Contrary to commonly accepted understanding, hedge fund…