Adding equity does not always increase portfolio risk: New study compares different debt, equity and gold portfolios
· livemint.com
A 100% debt portfolio delivered an average annual return of 6.79% with volatility of 6.38%. However, adding a 10% equity allocation improved returns to 7.99% while reducing volatility to 5.76%, showing that higher equity exposure does not always translate into higher portfolio risk.
Investors often link equity exposure with higher portfolio risk due to the volatility associated with stock markets. However, historical data suggests that addi...