DelFINL · External financing · Richardson et al. (2005)

Change in financial liabilities

Long minus short quintile portfolio, value-weighted, market-adjusted. Quarterly, 1952Q3 to 2024Q4.

Expected return · posterior mean, % per quarter

Next quarter

−1.29%

95% interval −2.03% to −0.03%

Next year

−0.97%

95% interval −1.67% to 0.10%

Next five years

−0.05%

95% interval −0.70% to 0.60%

Next quarter

1.10%

95% interval 0.86% to 1.33%

Next year

1.10%

95% interval 0.81% to 1.38%

Next five years

1.11%

95% interval 0.66% to 1.52%

Next quarter

0.39%

95% interval −0.13% to 0.94%

Next year

0.41%

95% interval −0.14% to 0.96%

Next five years

0.49%

95% interval −0.16% to 1.09%

Next quarter

1.70%

95% interval 1.33% to 2.06%

Next year

1.65%

95% interval 1.26% to 2.02%

Next five years

1.50%

95% interval 0.93% to 2.05%

Cumulative market-adjusted return

+500% since 1952Q3 · log scale

Window	Mean	Vol.	Sharpe	t
1952Q3–2024Q4	2.70%	6.68%	0.40	3.44
2020Q1–2024Q4	−3.77%	11.28%	−0.33	−0.75
2024Q1–2024Q4	−23.76%	13.74%	−1.73	−1.73
1952Q3–2024Q4	6.58%	5.13%	1.28	10.90
2020Q1–2024Q4	1.21%	7.43%	0.16	0.36
2024Q1–2024Q4	8.15%	6.07%	1.34	1.34
1952Q3–2024Q4	2.53%	8.76%	0.29	2.46
2020Q1–2024Q4	3.68%	12.83%	0.29	0.64
2024Q1–2024Q4	4.23%	3.83%	1.11	1.11
1952Q3–2024Q4	8.04%	6.88%	1.17	9.96
2020Q1–2024Q4	1.77%	9.82%	0.18	0.40
2024Q1–2024Q4	17.91%	7.88%	2.27	2.27

Horizon	Mean	95% interval	P(neg)
Next quarter	−0.395	−0.630 – −0.008	0.98
Next year	−0.295	−0.510 – 0.031	0.97
Next five years	−0.014	−0.208 – 0.178	0.56
Next quarter	0.437	0.340 – 0.527	0.00
Next year	0.435	0.320 – 0.546	0.00
Next five years	0.433	0.257 – 0.595	0.00
Next quarter	0.089	−0.030 – 0.215	0.08
Next year	0.095	−0.032 – 0.220	0.07
Next five years	0.112	−0.036 – 0.248	0.06
Next quarter	0.503	0.390 – 0.618	0.00
Next year	0.485	0.368 – 0.598	0.00
Next five years	0.436	0.271 – 0.596	0.00