What if I told you about an investment fund that diversifies your portfolio, shields you from fluctuations in the stock market, and earns double-digit returns? Sounds interesting, right? Did I mention that this investment also creates potentially life-saving treatments for deadly rare diseases? This fund doesn’t exist — at least not yet. I’m cautiously optimistic, however, that in the near future we’ll see the launch of an orphan disease “mega-fund” that finances early-stage biomedical research and drug development and is also a tidy investment.

MIT Sloan Professor Andrew Lo authored this blog post about the development of a mega-fund to finance research and drug development for orphan diseases.

Andrew Lo, finance professor at MIT, combines economics, psychology and evolutionary biology to develop models that maximize returns in bull markets and sidesteps losses in panics.

MIT Sloan finance professor Andrew Lo applies a hedge fund approach to increasing investment in drug development

With rising interest rates hurting bond prices, investors and financial advisers are scrambling for other options to provide stability to their portfolios. Some of them have turned to "alternative" funds, many of which claim to offer bond-like stability without exposure to interest-rate rises. Alternative funds use hedge-fund-like strategies to try to capture returns that aren't tied to broad markets. Some funds use options to limit their market exposure, for example, or place bets that certain stocks will drop in value. Professor Andrew Lo comments on the use of alternative funds.

The financial crisis was, among other things, a data failure. Now the Treasury’s Office of Financial Research is trying to use data to create an early warning system for risk.

In this blog post MIT’s Andrew Lo describes how technology can analyze language to suggest who might have authored unsigned U.S. Supreme Court opinions.

Andrew W. Lo and his coauthors (Robert C. Merton, Monica Billio, Mila Getmansky, Dale Gray and Loriana Pelizzon) discuss the interconnectedness of global markets and the need for policy integration in a Financial Analysts Journal piece, “On a New Approach for Analyzing and Managing Macrofinancial Risks,” which appears in the March/April 2013 issue. Abby Farson Pratt, assistant editor at CFA Institute, recently talked with Lo about his team’s research as part of a series of FAJ author interviews.

Economists and financiers are thinking creatively about investing in cancer research, in desperate need of funding. Earlier this week, some of America's top cancer doctors convened in Boston for some intensive brainstorming about future research into the disease. But this particular gathering, organized by the MIT Sloan School of Management and known as CanceRX, featured a novel twist: next to the oncologists, there were renowned economists such as Andrew Lo and Robert Merton. More unusual still, there were bankers and financiers too.

Can financial engineering cure cancer? It is an outlandish question, and many might find it distasteful, but the answer might be "yes". It is worth trying to find out. This is the argument of Andrew Lo, a brilliant and entrepreneurial finance professor from the Massachusetts Institute of Technology's Sloan School of Mangement, who convened a conference to float his idea for a cancer-fighting "super fund" this weekend, following a tour to London to present his ideas.

Lecture 1: Evolutionary Foundations of Behavior and Rationality

Lecture 2: Adaptive Markets in Theory and Practice

Lecture 3: Hedge Funds - The Galapagos Islands of Finance

Financial engineering failed dramatically in the financial crisis, but maybe it could be used to help persuade institutions to invest in cancer research. Professor Andrew Lo of MIT's Sloan School of Management explains how to Long View columnist John Authers.

Andrew Lo, an economist and finance professor at the Massachusetts Institute of Technology's Sloan School of Management, discusses how behavioral issues can influence investors. Lo talks with Bloomberg's Pimm Fox and Vonnie Quinn on Bloomberg Radio's "Taking Stock."

In a question and answer with Business Insider's Rob Wile, Professor Lo speaks about the state of the markets, why investing must now be treated like exercise, and what we can expect from his latest work.

After a global economic slump caused by seemingly reckless financial market activity, a period of calm might appear welcome. But moribund markets spell bad news for bank employees, and schadenfreude by others would be misplaced if they were being lulled into a false sense of security.