The Intrinsic Value Podcast - The Investor’s Podcast Network MI270: How to Improve a 100% Stock Portfolio Using Return Stacking w/ Corey Hoffstein
13 snips
May 2, 2023 AI Snips
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Episode notes
Return Stacking's Origin and Benefit
- Return stacking, derived from the 1980s concept of portable alpha, offers a way to add diversifying returns.
- It allows investors to combine core holdings with alternatives, addressing the dilemma of selling assets to buy new ones.
Return Stacking Simplified
- Return stacking involves layering returns from a diversifying source onto an existing portfolio. It's like an A + B = C equation, enhancing the portfolio's return potential.
Asness's Challenge to 100% Equities
- Cliff Asness's paper, "Why Not 100% Equities?", challenges conventional wisdom about equity allocation.
- A leveraged 60/40 portfolio can outperform a 100% equity portfolio with similar risk, highlighting diversification's power.