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Investing - Theory, News & General • Why can't asset allocations also be passively managed by following the markets?

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Why wouldn't most people also want to choose their asset allocation between stocks and bonds (and other assets) passively, based on the total market cap of the respective markets?
The allocation between stocks and bonds is mostly about how you control risk. Why would I let someone else decide how much risk to take in my portfolio? I know my own circumstances and want to control that.
We don't know how risky stocks and bonds are, beyond stocks are riskier under usual definitions of risk.
Sure, but you can swag decently, and I don't see why not knowing the exact riskiness should prevent one from deciding on "more risk" or "less risk" if it's appropriate for your situation.
That's a far cry from "Why would I let someone else decide how much risk to take". It is an active strategy.

See the Sharpe thread.

Statistics: Posted by exodusing — Fri Feb 09, 2024 12:02 pm — Replies 9 — Views 296



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