Critical analysis of two articles

1. Critical analysis of two articles
   • Article 1

Prondzinski, D., & Miller, M. (2018). Active Versus Passive Investing: Evidence From The 2009-2017 Market. Journal of Accounting and Finance, 18(8), 119-143.

• How was the research method applied

The research was conducted through an empirical analysis process. Miller (2018)analyzed the various elements of the two types of investments, active versus passive investing.The researcher used structured and semi-structured questionnaires to obtain information on the value of active and passive investments. With each characteristic noted, they analyzed the various basics of eachinvesting and compared the active investment to the value investment. The passive investment to the growing investment to help to understand what each kind of finance entails. The researchers have established that there exists a positive kind connection between the favorable relations, value premiums, and the stock market sentiments.  From the analysis, the researchers offered answers on how value and growth investments can earn favorable long-run premiums in time, based on either active or passive investment.

The Miller in the studydid establish that active investment is good enough, but the passive investment, just like growth investment, earns the investor more.The empirical research that was conducted by the author Miller et al., (2018) was based on the difference in the value of returns from the premiums in the long run that comes from growth and value investment. This was compared to the information based on evidence from the 2009-2017 markets. The study was conducted among 157 respondents from the three selected investment companies. The difference between the two types of investments was analyzed based on what is the element of the premiums returns from the years of investments..

• Contribution to theory and research

The article has a massive contribution to the value and growth of investment research. First, it outlines the element of active and passive investment, an aspect that relates well with the subject of study. According to the analysis of the article, the research methodology immensely contributes to the development of research.  It gives the assumption that surrounds the element of growth and value investment. The methods used in the study directly lead to the development of empirical research. The researchers in the study examine the differences that exist between active and passive types of investment. The methodology used in the study brings a clear distinction between what each kind of finance entails.

The findings from the research also aid and directs further investigations that will be conducted on the aspect of value versus growth investment. The methodology used also illustrated the value of the companies that use growth and profits investment as the difference between the two investments. The researchers examined the several elements of the investment from 2017 to 2019 and developed a vital aspect of the relationship between the two investment methods. Each was designed with an accurate understanding of the investor sentiment in mind to bring out the differences between the two aspects of investments. The methodology used in the study of this article relates quite well with the element of the two types of investment while pointing out the differences between the two. The methodology also helps in the development of the theory of investment that goes beyond the aspect of the two kinds of investments; value and the growth investment.

• What gap may it leave?

Even though the study is capable of bringing out the actual differences between the growth and the values investments through the empirical analysis of the active and passive investment based on evidence from the 2009-2017 market, several gaps are left, which will call for future studies. The first gap in the research for future investigation is the actual cause of the disparity that exists in premiums return from each kind of investment. The researchers in the article did not bring out this purpose of difference that is seen between the two methods of investments. The article also does not highlight some of the disadvantages of each kind of investment, which is either passive or active investment. This study calls for further examination related to each type of investment.

Second, the research does not establish whether the disparity is a result of the market shifts or any other factor during the process of investment. The study only reveals the gap in the premium results associated with each kind of investment. However, there exists a difference as to why one type of investment yields better returns in the long run and why the other yields better profits in the short term. This is the other gap for future analysis or research that ought to be carried out. Thirdly, the inquiry does not list the advantage of the disadvantages associated with each type of investment. Lastly, for a better understanding of which is a preferred investment, the time frame used could have been longer, for example, from 2000-2017. Hence, there is a need for a future study to demonstrate the benefits and the problems that are associated with each type of investment.

• Article 2

Mikutowski, M., Kambouris, G. D., &Zaremba, A. (2019). A note on value investing in the UAE stock market. Journal of Research in Emerging Markets, 1(2), 33-38

• How the research method was applied

The authors outline the value of investing in the UAE stock market concerning growth and value investment. A quantitative review of a note on value investing in the stock market did bring out the aspect of the research methodology, which connects the elements of the value investing against an aspect of growth investing. The overall research and information on the various elements of this study are based on the hypothesis which informs on the two types; value and growth investment.

Through the qualitative analysis of the investment result from the four selected companies in the UAE stock market, the research did come up with a conclusive understanding of value and growth investment.  This is a vital tool for the research was an analysis of the stocks with a clear understanding and relation to the critical research question of the study. According to the researchers, they wanted to ascertain the value of the two types of investments from the UAE perspective, which is one of the fastest advancing global economies.According to the empirical study and the qualitative study by Zaremba (2019), stock market value growth is inspired by an active investment of the growth and value investment through an empirical analysis of the result that was developed from the UAE stock markets. Further,  interviews were conducted to the managers of these companies listed in the UAE stock market.

• Contribution to the theory and research

The research used the empirical analysis of the study that was conducted by a different organization on the aspect of return on both growth and value investment. According to the researches, this methodology aims at establishing the disparity of the difference in the value of returns both on the two types of investments was based on the UAE stock markets.  However, the major focus based on the study is aimed at establishing a fully formed opinion, and the main research question being that is being tested is on whether the returns on whether value investing yield a higher average retunes compared to the growth investing from the study of the stocks. The methodology used in the study clearly develops an understanding of the investment return from the findings of the construction the UAE stock market analysis brings.

• What gape it may leave?

Despite the success in the article and its immense contribution toward this research, it leaves several gaps and or questions unanswered, which will be investigated in the future. The study is limited to the element of the disparity between the value and the growth investment based on the aspect of the UAE stock market alone. Zaremba’s research does not highlight factors of average return that is associated with growth and value investment. With the focus of the article being the disparity between the two topics, it is, however, quite technical to link the discrepancy between the value and the growth average return with the role that is played by the changing characteristics which the study mentions. This gives an open chance for further study or research in the future. Lastly, this study leaves behind the gap on the question of which is the popular trend on the value and growth return as a result of the individual investment type characteristics.

Furtherresearchcanalso be developed on how to improve the value of growth investment since the growth investment is often associated with the active investment. Future research would focus on what aspect of value investing is failing.