The optimal portfolio of risky assets is exactly the same for everyone :
1. Investors should control the risk of their portfolio not by reallocating among risky assets, but through the split between risky and risk-free assets.
2. The portfolio of risky assets should contain a large number of assets – it should be a well diversified portfolio.
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- 80There is a reason why I recommend everyone download (and read) this document. Not only is it free but it provides both novice and experienced investors with some perspective on some very basic issues. For example, the next time some one says you should divest your portfolio of so-called “sin…