Puzzles, Premiums, and Popularity: Asset Allocation & Stock Selection
Across asset classes and in fixed income, the greater the risk the greater the return. Can we get more return while taking on less risk in the stock market? What does behavioral finance tell us about popularity and how to invest? Can we package the less popular premiums to outperform our benchmarks? Why do investors not like small, value, or less liquid stocks? The answers to these questions provide the key to effective management of asset allocation and stock selection.