Author

  • Heng-Hsing Hsieh

    • University of the Western Cape, South Africa
    • South Africa

Abstract

The dominance of the electronic sector in the Taiwanese stock market and the relatively low historical correlation between the Taiwanese electronic and financial sector indexes call for the exploration of sector diversity in the Taiwanese stock market. This study investigates the effectiveness of sector timing in Taiwan by evaluating the likely outcomes from switching between the electronic and the financial indexes for data spanning the period December 1999 through December 2012. The proposed sector timing strategy could be implemented using Taiwanese sector index futures. The market timer is assumed to have different timing abilities in the electronic-dominant market and the financial-dominant market. The main results of the research include that when transaction costs are taken into consideration, significant sector timing ability is required to beat the sector benchmark; and it is more important to improve the ability in timing the financial-dominant market in Taiwan.

Keywords

References

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How to Cite

Hsieh, H.-H. (2013). Potential Gains from Sector Timing in Taiwan. Journal of Economics and Behavioral Studies, 5(10), 708-717. https://doi.org/10.22610/jebs.v5i10.444

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Section

Research Paper

Published in

Vol. 5 No. 10 (2013) Technology, Trade & Development Policy View issue contents

Published

2013-10-20

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