Lifecycle investment decisions and labor income risk

Luca Benzoni and Robert S. Goldstein ()
Additional contact information
Robert S. Goldstein: https://carlsonschool.umn.edu/faculty/robert-goldstein

FRBSF Economic Letter, 2010, issue jul12

Abstract: The optimal proportion of financial wealth placed in stocks versus risk-free bonds changes over an investor's life and is very sensitive to the long-run correlation between stock returns and labor income. If this correlation is assumed to be high, then the optimal proportion of stock is hump-shaped and approximately zero for young agents, in contrast to the claims of financial advisers and most academic models.

Keywords: Investments; Income (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.frbsf.org/publications/economics/letter/2010/el2010-21.html (text/html)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.frbsf.org/publications/economics/letter/2010/el2010-21.html [301 Moved Permanently]--> https://www.frbsf.org/publications/economics/letter/2010/el2010-21.html)
http://www.frbsf.org/publications/economics/letter/2010/el2010-21.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfel:y:2010:i:jul12:n:2010-21

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in FRBSF Economic Letter from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().