Unintended Bets and Diversification: Navigating Long-Term Goals in Portfolio Construction
Pirates of Finance
00:00
The Importance of Balanced Portfolios
Both of us have some sort of, I guess, implicit reversion bias, which is why we'd like to be balancing probably over a longer time horizons. So you are implicitly underweight communication services and technology and massively overweight energy and utilities; those are very active bets that you're making in your portfolio. And so you are saying, well, make Korea, I sort of have this meaner version bias. That's fine. I don't want to take a bet. I just want to let the market price the sectors as they do.
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