Assume for a moment that you must pick one of two investment portfolios. The first one is a buy and hold approach, 100% stocks. The second portfolio gets 50% of the upside and 50% of the downside. Which would you pick? For the 2nd approach, the initial investment of $1,000 declined to $764 in less … Continue reading 50/50
Category: Quant
When Diversification Fails
If you believe in asset allocation, then this paper (attached) is for you. In their paper "When Diversification Fails," T Rowe portfolio managers, Sébastien Page, CFA, and Robert A. Panariello, CFA, conclude that "One of the most vexing problems in investment management is that diversification seems to disappear when investors need it the most." Their … Continue reading When Diversification Fails
