The Motley Fool Discussion Boards

Previous Page

Investing Strategies / Risk

URL:  https://boards.fool.com/you-havent-missed-anything-if-two-assets-have-15243459.aspx

Subject:  Re: Volatility and returns Date:  6/24/2001  4:14 PM
Author:  solasis Number:  73 of 297

you haven't missed anything. if two assets have the exact same long run total return and have negatively correlated short run returns, then the periodic rebalancing from one asset to the other will produce higher long run returns.

unfortunately, in real life there probably are not any two assets where both conditions are satisified over a long time period.

tr
Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us