Lifecycle Investment Decisions and Labor Income Risk
نویسندگان
چکیده
The optimal proportion of financial wealth placed in stocks versus risk-free bonds changes over an investor’s life and is very sensitive to the long-run correlation between stock returns and labor income. If this correlation is assumed to be high, then the optimal proportion of stock is humpshaped and approximately zero for young agents, in contrast to the claims of financial advisers and most academic models.
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