tag:blogger.com,1999:blog-6177735060190574172.post5658836173806842545..comments2023-12-10T07:14:27.048-05:00Comments on The Richwine Archive: The myth of time diversificationJason Richwinehttp://www.blogger.com/profile/12322702869663924123noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6177735060190574172.post-69384685692473260992016-05-06T14:02:01.860-04:002016-05-06T14:02:01.860-04:00Collective systems, Especially defined Benefit pen...Collective systems, Especially defined Benefit pensions Need to be especially cognizant of the Fallacy. They need to fully defease their liabilities before they can take higher volatility exposure. If they are paying out 5% of their asset base in benefits and suffer a 30% drawdown, they may ultimately never come back even with 7% subsequent returnsAnonymoushttps://www.blogger.com/profile/07505894221520713889noreply@blogger.comtag:blogger.com,1999:blog-6177735060190574172.post-70634598051066897002016-05-06T14:01:56.435-04:002016-05-06T14:01:56.435-04:00Collective systems, Especially defined Benefit pen...Collective systems, Especially defined Benefit pensions Need to be especially cognizant of the Fallacy. They need to fully defease their liabilities before they can take higher volatility exposure. If they are paying out 5% of their asset base in benefits and suffer a 30% drawdown, they may ultimately never come back even with 7% subsequent returnsAnonymoushttps://www.blogger.com/profile/07505894221520713889noreply@blogger.comtag:blogger.com,1999:blog-6177735060190574172.post-33898924978991135252014-04-24T16:19:03.269-04:002014-04-24T16:19:03.269-04:00Not exactly. Samuelson's original papers (196...Not exactly. Samuelson's original papers (1963 and 1969) were narrow in the assumptions used. He acknowledged in a 1989 paper at least 3 cases where time diversification is valid -- using different assumptions to frame the issue. Most importantly, his original analysis was based on a single investor, with an account balance growing over time. Ongoing collective systems, including pension plans, have an asset base that tends to stay relatively stable in real terms -- reducing the risk of the long-term pursuit of the equity risk premium.Anonymousnoreply@blogger.com