> An controversial book on investing I recently read is Lifecycle Investing which argues that young people are often much too conservative in their investment strategy, because they should model their future earnings as a bond and allocate enough to equities to compensate for holding this bond, even leveraging up to 100% to get the right allocation.
That’s a pretty interesting idea. I wouldn’t take the future earnings = bond concept literally, especially if you’re in a high volatility profession, but it seems useful as a mental check when assessing asset allocations.
That’s a pretty interesting idea. I wouldn’t take the future earnings = bond concept literally, especially if you’re in a high volatility profession, but it seems useful as a mental check when assessing asset allocations.