SLIDE 1
1
- 1. What Is Risk?
- Your view
- In the short term
- In the long term
- Evidence
- 2. Risk and the Holding Period
- Evidence
- Time diversification
Long‐Term Trends (II):
Risk
Javier Estrada ADFIN – Winter/2014
Javier Estrada IESE Business School Barcelona Spain ADFIN Winter/2014
What Is Risk?
- Let’s start with your view
Go
- What is risk in the short term?
Go
- Largely regardless of how risk is measured, stocks
seem to be riskier than bonds in the short term
- What is risk in the long term?
Go
- Shortfall risk
- P(R < Benchmark)
P(R < Inflation) → Buffett P(RS < RB)
Go
- Largely regardless of how risk is measured, stocks