Homework due on Wednesday, October 5

Homework due on Wednesday, October 5, at 13:00

Please read the following two articles:

http://www.advisorperspectives.com/dshort/updates/2016/09/01/is-the-stock-market-cheap
http://www.businessinsider.com/stock-market-crash-2015-7
and learn from other places on the internet what advice on investment portfolio composition is typically given to people by financial advisors. For example, a typical piece of advice is that the young should invest more in stocks and people closer to retirement should invest more in bonds. Then answer the following:

(1) What do you think is generally at most times a good portfolio composition choice? How does it depend on the characteristics of the investors? You may consider different types of splits of the population, such as younger vs. older; low-income vs. high income; people who do not plan to have children vs. people whose children will enter college, say, 15 years from now; people living in different countries; people with unstable jobs (say, working for the oil industry) vs. those with stable jobs (say, elementary school teacher).

(2) Right now, in the year 2016, would you still give the same advice that you think is appropriate for many other times in history? Or would you modify your advice due to the present situation? In the portfolio composition, would you overweight or underweight a particular asset class?
Your discussion should be about three pages long. Please submit it in the PDF format.

Upload instructions: Please submit your homework in the PDF format by uploading it below. The filename should be HW20161005YourName.pdf, with "YourName" replaced appropriately. If you are logged in, you can make an upload by placing your mouse on top of the bottom left corner of this text field, clicking the plus sign that appears, and then on the second sheet (reachable by clicking the second dot in the top right corner) of the "ADD CONTENT" menu selecting "File". Please edit the text of the link so that your full name is visible. You can change the text of the slink simply by clicking on it and typing. When you are done, click the "PUBLISH" button at the top of the screen on the right. If you have trouble, please send me the file by email instead.

I