Does diversification plus leverage beat an all-equity portfolio?
SUMMARY
INTRODUCTION
In 2023, Aizhan Anarkulova, Scott Cederburg and Michael O’Doherty published a working paper, Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice, that made the case for a 100% equity allocation for some investors. The authors showed that, over the long run, global equities outperformed stock-and-bond portfolios.