Top investing research for the week of July 8, 2012
Financing from Family and Friends: While prevalent, borrowing from family members (microfinance) deters risk taking. Entrepreneurs specifically turn to formal finance because it’s regulated solely by contract. These two models will have major impact on upcoming crowdfunding models.
Equity Lending and Mutual Fund Performance: Mutual funds make money by lending the securities they own. But why not just sell them? This paper focuses on that decisions and finds that active funds that engage in share lending underperform otherwise similar funds. Pretty interesting.