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Naive Investment Strategy vs. Sophistication and Optimization

Optimal diversification is one of the key insights of modern portfolio theory, however, due to estimation errors, theory-based portfolio strategies are not as good as one once thought; under some circumstances, the difference between sophisticated models and naive strategy is not statistically significant. Naive Investment Strategy (Naive Diversification) is instinctive

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Featured, Investment Conversations w/Chenjiazi,

Target-Date Funds: Find a More Secure Path to Retirement

Asset allocation determines the blend of investments in each portfolio; the process seeks to maximize value based on one’s time horizon and tolerance for risk. A target-date fund offers specific asset allocations and investment selections for specific objectives. It automatically resets the asset mix of equities and fixed income assets

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