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DAILYALTS: A Look At The Myth of Time Diversification

TedTed
in Fund Discussions
FYI: Time is said to heal all wounds, and the conventional view is that time diversifies risk. An investor with a thirty-year time horizon can recover from short-term losses, while a short-term investor may not have time recover from those same losses before his time window is closed. But a new research report by Ineichen Research & Management, and provided by Virtus Investment Partners, says that time diversification is a myth – time, instead of diversifying, amplifies risk.
Regards,
Ted
http://dailyalts.com/look-myth-time-diversification/

Comments

  • AKAFlack
    Huh.
    Sounds familiar.
  • JohnChisum
    The “time diversifies risk” theory generally supports the long-only “buy and hold” investment style, which is unadvisable in Ineichen’s view. Instead, investors should consider implementing alternative strategies, such as long/short equity, which involves short-selling as well as buying stocks. This way, investors can be better prepared for market corrections and expect more consistent portfolio returns.
  • AKAFlack
    JohnChisum,

    Sorry, I didn't make myself clear.
    I'm in Ineichen's camp... have been for several decades...
    which means that I sell short aggressively in bad markets.
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