Today, investors rightly worry about how trillions in monetary and fiscal stimulus will impact inflation, interest rates, economic growth, company earnings, and equity valuations. Recently, I wrote an article about the importance of preparing investment portfolios for multiple scenarios in the face of uncertainty. Here is an excerpt:. The benefits of diversification do not come from simply adding more investments to an asset allocation, but rather, from adding investments with lower correlations to existing investments within the allocation.
Portfolio Diversification and the Reduction of Risk (Research Paper Sample)
5 Tips for Diversifying Your Portfolio
Email: jazar iese. His work studies the implications for competition of the rise of common ownership of companies by large and diversified asset managers. More recently, he has done research on labor market concentration and power. Google Scholar Page. Using novel data on engagements of the Big Three with individual firms, we find evidence that the Big Three focus their engagement effort on large firms with high CO2 emissions in which these investors hold a significant stake. Consistent with this engagement influence being effective, we observe a strong and robust negative association between Big Three ownership and subsequent carbon emissions among MSCI index constituents.
Exchange rates risk and equity portfolio diversification.
When the market is booming, it seems almost impossible to sell a stock for any amount less than the price at which you bought it. However, since we can never be sure of what the market will do at any moment, we cannot forget the importance of a well-diversified portfolio in any market condition. For establishing an investing strategy that tempers potential losses in a bear market , the investment community preaches the same thing the real estate market preaches for buying a house: "location, location, location. This is the central thesis on which the concept of diversification lies. Read on to find out why diversification is important for your portfolio, and five tips to help you make smart choices.
Items in Dataspace are protected by copyright, with all rights reserved, unless otherwise indicated. Princeton University Doctoral Dissertations, Economics. Show full item record. All of DataSpace This Collection.