Bulls, Bears, and Retirement Behavior

Bulls, Bears, and Retirement Behavior

Long-run Bulls and Bears∗

A central challenge in asset pricing is the weak connection between stock returns and observable economic fundamentals. We provide evidence that this connection is stronger than previously thought. We use a modified version of the Bry-Boschan algorithm to identify long-run swings in the stock market. We call these swings long-run bull and bear episodes. We find that there is a high correlation ...

Bulls, Bears and Market Sheep*

Much has been written about the efficiency of markets in general and of the market for equities in particular, and of its implications for the more-orless random-like behavior of stock prices. The conventional argument is that opportunistic trading by rational investors will arbitrage away any gains that can be made from predictable patterns; what is left are the perturbations in asset values c...

Social Security, retirement incentives, and retirement behavior: an international perspective.

Escalating rates of early retirement are imposing fiscal pressure on retirement systems around the world. In some developed countries, the labor-force participation rates of men ages 60-64 have fallen by 75 percent over the last three decades. One explanation for this striking decline is social security program provisions which create disincentives to continued labor-force participation by olde...

Better Safe than Sorry: Bulls, Bears, and Optimal International Portfolio Choice under Disappointment Aversion

This paper examines optimal international portfolio choice when equity market linkages increase during periods of distress and investors are averse to disappointing outcomes. I propose a model that captures the joint effect of these two phenomena and show that it leads to a first-order effect on the optimal portfolios. Even during correlated downturns, international diversification is still hig...