Using a representative survey of the German population, this paper studies self-reported individual consumption responses to a recent payroll tax reduction. About 55 percent of the respondents report that they spend the extra money, indicating considerable potential for tax changes to affect...

This paper provides background information and basic descriptive statistics for a representative survey of the German population conducted on our behalf by GfK in the first quarter of 2013. The survey addresses important topics in fiscal policy, including: 1) public preferences on the...

We successfully show that it is possible to optimize both for risk and for asset allocation without compromising the optimization of individual goals by introducing the novel concept of a compensation portfolio. Therefore, we solve for the global vs. local optimization paradox by bridging Modern...

A holistic wealth overview coupled with goal-based investing is the basis for excellent wealth management and increased investor happiness. Potentially innovative technologies and a shift in focus of financial advisors will offer the tools clients need to understand and manage their holistic...

The tonality of news reporting has been shown to have explanatory and predictive power for equity prices. Using a novel approach and data set, we demonstrate that the news sentiment effect also holds for US government bond duration. We construct a successful trading strategy for the US 10-year...

We explore the impact of media content on sovereign credit risk. Our measure of media tone is extracted from the Thomson Reuters News Analytics database. As a proxy for sovereign credit risk we consider Credit Default Swap (CDS) spreads, which are decomposed into their risk premium and default...

News and sentiment in news often influence financial markets and asset prices. While this is well-recognized by investors, only few studies have used sentiment in news to predict future developments in financial markets to formulate alpha generating strategies, let alone create a best practice...

The author identifies and explains asymmetric reactions in implied volatility of S&P 500 Index options across the term structure based on news sentiment. The asymmetry of the reaction is more pronounced for fear (proxied by put options) than for greed (proxied by call options). This asymmetry is...

Robo-advisors are digital platforms that provide automated investment strategies and offer solutions in three key areas: (1) access to and rebalancing of passive and rule-based investment strategies, (2) cost-efficient implementation of a diversified asset allocation, and (3) behavioral biases....

We introduce news sentiment as a variable that can explain and predict subsequent changes in the USD/EUR exchange rate, and therefore close a gap in the foreign exchange literature. By applying the concept of frequency filtering from the domain of electrical engineering, we show an innovative...