{'fraction_non_alphanumeric': 0.029182879377431907, 'fraction_numerical': 0.0, 'mean_word_length': 5.052941176470588, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Assessing Stop-Loss and Re-Entry Strategies

Many practitioners use stop-loss strategies to limit excessive losses on existing investments. In practice, however, the value of stop-losses can be assessed only when re-entry rules are considered jointly with stop-loss rules. In this article, we analyze the benefits of joint stop-loss and re-entry rules from the perspective of both risk reduction and return enhancement for six different global equity markets, as well as for listed real estate investments, a commodity index, and gold. We find that stop-loss rules significantly reduce volatility and excessive losses. The evidence on return enhancement, however, is mixed, with stop-losses increasing absolute and risk-adjusted returns for most equity markets and listed real estate but not for commodity indexes or gold. We also find significant differences between secular bull and bear markets, with stop-loss and re-entry rules providing higher risk-adjusted returns during secular bear markets but not during bull markets.