Prof. Matteo Maggiori of Stanford University on investor beliefs, trading, and global capital flows
Scientific Sense ®
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Is There a Cost to Portfolio Reallocation?
There is a relationship between beliefs and portfolio elocation. But when the delta in changes happen, it doesn't appear to really flow through the portfolio conversation. If i got more optimistic, ar more likely to buy equity. In proportion, the more i've gotten optimistic. The part where i mention the sensitivity is low. And so ye might explain why, for example, tha stock market seems to be so volatile, compared to the actual state of the economy.
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