2min chapter

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Episode 259: Comprehensive Overview: Estimating Expected Returns

The Rational Reminder Podcast

CHAPTER

The Importance of Uncertainty in Investment Horizonte

Uncertainty about the parameters, especially about the mean of the return process, is increasing. That uncertainty drives a wedge between historical estimates based on conventional wisdom and forward-looking estimates that matter to investors. So we do get long horizon investors facing more volatility than short horizon investors.

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