Critical Finance Review > Vol 14 > Issue 1

So What Do We Learn from Li and Wang (2025)?

Michael Ungeheuer, Aalto University, Finland, michael.ungeheuer@aalto.fi , Martin Weber, University of Mannheim, Germany, weber@bank.BWL.uni-mannheim.de
 
Suggested Citation
Michael Ungeheuer and Martin Weber (2025), "So What Do We Learn from Li and Wang (2025)?", Critical Finance Review: Vol. 14: No. 1, pp 123-128. http://dx.doi.org/10.1561/104.00000153

Publication Date: 19 Mar 2025
© 2025 Michael Ungeheuer and Martin Weber
 
Subjects
 
Keywords
C91G41G11G12
Investment decisionsDiversificationCorrelation neglectRisk takingAsset pricingExperimental research
 

Share

Download article
In this article:
1. A Dead End: Why We Learn Little from Li and Wang (2025) 
2. Making Progress: How to Learn About Drivers of Portfolio Choice in Ungeheuer and Weber (2021) 
References 

Abstract

We criticize ad-hoc tests of return predictability, like those presented by Li and Wang (2025), which are purely motivated by statistical associations. Without ex-ante hypotheses grounded in theory or evidence on portfolio choice, it is difficult to say what we learn from such correlation exercises. We then discuss how convincing progress can be made in uncovering the foundations of portfolio choice and asset pricing, drawing on our own experimental research for illustration.

DOI:10.1561/104.00000153