Candès, Hastie, Hogan, Kahn, Luo, and Spector develop a novel framework to measure whether thematic baskets capture real, coherent risks that matter for investors. Their findings challenge conventional risk models and highlight both the dangers and opportunities of betting on investment “themes.” Thematic Investing: a Risk-Based Perspective was originally published at Alpha Architect. Please read the Alpha Architect disclosures at your convenience.| Alpha Architect
A sufficient portfolio consists solely of a ladder of inflation-indexed bonds, such as U.S. Treasury Inflation-Protected Securities (TIPS), and a stock market index fund. We explain theoretically and demonstrate empirically how this strategy is less risky and more effective at maximizing lifetime retirement income than are methods commonly used by financial advisors. A TIPS Ladder Plus Stocks: Retirement Planning Solved? was originally published at Alpha Architect. Please read the Alpha Archi...| Alpha Architect