Tail Risk Hedging | Nassim Taleb, The Fed, Macro 'Investing', Faith Based Alpha & Antifragility
Pirates of Finance
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The Effect of the Fed on Asset Allocation Decisions
The study basically shows that. People have a non linear response in their asset allocation choices based upon the risk free rate under this condition. When interest rates were negative it was actually almost close to 80% inequities. And then it curved down and went down to 50% in the risky asset. So we can say that maybe the Fed doesn't have a real impact on the economy. But if they are controlling the risk free Rate, does it not create does it not potentially create a behavioral shift among investors?
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