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Financial Assets as Profit-Makers in Inflationary Periods
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Financial Assets as Profit-Makers in Inflationary Periods

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 30 June 2024 | Viewed by 6751

Special Issue Editor

Dr. Nikolaos A. Kyriazis

E-Mail Website
Guest Editor
Department of Economics, University of Thessaly, 28th October 78 Street, 38333 Volos, Greece
Interests: financial economics; monetary economics; unconventional monetary policies; digital currencies
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

Financial markets have become increasingly unpredictable since the onset of the large inflationary pressures in 2021 and the great repercussions of the price level uncertainty on the investing capacity of economic agents. This has drawn opprobrium among a large spectrum of economic viewpoints concerning whether traditional financial assets (precious metals, bonds, stocks, currencies) or modern financial assets (ETFs, large-cap cryptocurrencies, green cryptocurrencies, DeFi tokens, and NFTs) could act as profit-makers during inflationary periods and as hedgers against losses and wealth reduction. The great loss of purchasing power has intensified risk seeking and has proved influential for investor appetite. Moreover, the large levels of inflation have rendered tighter monetary policies a prerequisite for returning to normality. Thereby, more expensive liquidity has suppressed aggregate demand and investment projects and strengthened trading activity in stock and cryptocurrency exchanges in unequal proportions.

This Special Issue aims to cover changes in investment decision making due to major inflationary periods such as the one we are currently in the midst of and cast light on unknown aspects of portfolio management when expected returns have to overcome the abrupt decrease in money values generated by rapidly increasing price levels. I am pleased to invite you and look forward to your valuable contribution in theoretical or empirical research related to conventional or modern financial tools and their nexus with intense inflationary phenomena. In this Special Issue, original research articles and reviews are welcome. Research areas may include (but are not limited to) the following:

  • Asset portfolio management in inflationary periods;
  • Linkages between inflation and financial assets;
  • The impacts of monetary policy interventions on wealth maximizing;
  • Fiscal and monetary coordination through the prism of evolution in financial markets. 

I look forward to receiving your contributions. 

Dr. Nikolaos A. Kyriazis
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Published Papers (3 papers)

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Research

41 pages, 1642 KiB  
Article
What Is the Effect of Oil and Gas Markets (Spot/Futures) on Herding in BRICS? Recent Evidence (2007–2022)
by Hang Zhang and Evangelos Giouvris
J. Risk Financial Manag. 2023, 16(11), 466; https://doi.org/10.3390/jrfm16110466 - 27 Oct 2023
Viewed by 1663
Abstract
We investigate the effect of gas/oil markets (spot/futures) on herding in stock markets in BRICS over 15 years (2007–2022). We consider the effect(s) of crises (Global financial, European debt, COVID-19, and Russia–Ukraine war), bull/bearish energy markets, volatility, and speculation. The effect of gas [...] Read more.
We investigate the effect of gas/oil markets (spot/futures) on herding in stock markets in BRICS over 15 years (2007–2022). We consider the effect(s) of crises (Global financial, European debt, COVID-19, and Russia–Ukraine war), bull/bearish energy markets, volatility, and speculation. The effect of gas and oil markets on herding in stock markets is minimal, and investors herd selectively during crises. Even during the ongoing Russia–Ukraine war, the effect of energy markets on herding in BRICS is minimal. Causality tests show that oil (spot/futures) Granger causes CSAD during COVID-19 only. Gas (spot/futures) has no effect. We also find that energy (spot/futures) market states (bearish/bullish) have no effect on herding in stock markets. Low volatility in energy markets can trigger herding (consistent with previous research in US, China) in all BRICS. Speculative activities during (non)crises appear to have minimal impact on herding. However, as the degree of intensity (volatility) in speculative activities increases in oil/gas, it causes herding in all countries (India is affected mostly), except Brazil. It is not the speculation activity per se in (non)crises that causes herding, but the intensity/volatility in speculation activity. Overall, oil/gas markets (especially gas markets) appear to have a smaller impact on herding than expected, contrary to public belief; however, as the intensity/volatility in speculative activities increases, then herding also increases, which is expected given the uncertainty that speculation causes. Full article
(This article belongs to the Special Issue Financial Assets as Profit-Makers in Inflationary Periods)
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11 pages, 1476 KiB  
Article
Why the High Values for the CAPE Ratio in Recent Years Might Be Justified
by Leo H. Chan
J. Risk Financial Manag. 2023, 16(9), 410; https://doi.org/10.3390/jrfm16090410 - 14 Sep 2023
Viewed by 3464
Abstract
In this paper, I propose a tracking error approach using the P/E ratio equation to approximate the CAPE Ratio. After accounting for the recent structural changes in the composition and valuation of the S&P 500 index, along with a persistently low interest rate [...] Read more.
In this paper, I propose a tracking error approach using the P/E ratio equation to approximate the CAPE Ratio. After accounting for the recent structural changes in the composition and valuation of the S&P 500 index, along with a persistently low interest rate environment over the last three decades, I show that the average CAPE Ratio had increases over time. Relying solely on historical CAPE averages to forecast equity returns may therefore prove unreliable. The findings in this paper indicate that investors should incorporate multiple factors, including required return and expected earnings growth, when forming capital allocation decisions across asset classes. Rotating out of the equity market simply because the CAPE Ratio shows that the equity market is too expensive might not produce the desire outcome investors hope for. Full article
(This article belongs to the Special Issue Financial Assets as Profit-Makers in Inflationary Periods)
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10 pages, 509 KiB  
Article
Effect of Yield Spreads (State Bonds) on Economic Growth Performance in Indonesia
by Kristian Chandra, Wahyuni Rusliyana Sari, Dwi Yantik Sriwulan and Muhammad Raditya Adhimukti
J. Risk Financial Manag. 2023, 16(3), 175; https://doi.org/10.3390/jrfm16030175 - 05 Mar 2023
Viewed by 1204
Abstract
This research analyzes the effect of the government bond yield curve spread on economic growth performance in Indonesia using the indicators of exchange rate, inflation, BI rate, foreign investment, portfolio investment, current account, and government accounts. Furthermore, it aims to prove the accuracy [...] Read more.
This research analyzes the effect of the government bond yield curve spread on economic growth performance in Indonesia using the indicators of exchange rate, inflation, BI rate, foreign investment, portfolio investment, current account, and government accounts. Furthermore, it aims to prove the accuracy of the vector autoregression (VAR) or vector autoregression model in predicting economic growth from Q1 2010 to Q3 2020. The results showed that the yield curve spread has a significant effect on economic growth. Meanwhile, the exchange rate, inflation, and the BI rate have a negative effect on economic growth. Capital inflows such as foreign direct investment, portfolio investment, as well as the current account balance and government balance have a positive effect on economic growth. These results are useful to government policymakers, fund managers, and investors, as they provide further evidence of the potential use of yield curves as an indicator of future economic activity. Full article
(This article belongs to the Special Issue Financial Assets as Profit-Makers in Inflationary Periods)
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