Skip to main content
This Board Has Moved

This board has been migrated to our new platform! Check out the new home page at discussion.fool.com or click below to go directly to the new Board on the new site.

Go to the New Site
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Can we make any reasonable assumptions about the future ?

Can we assume that a diversified portfolio of stocks will be correlated with a separate diversified portfolio of stocks ?

Can we assume that the return on two portfolios of stocks will be more closely correlated than the returns on a portfolio of stocks and say bonds ?

I have always just assumed that the best strategy is to be 100% in equities all the time and now I am not so sure.

My understanding of the central tenet of Modern Portfolio Theory that the volatility on a diverse portfolio of stocks is lower than the volatility of the individual component stocks ? Are you rejecting this ? Or are you rejecting CAPM, beta and subsequent developments ?

Brendan
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.