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If you think about it, that makes sense because the older your portfolio is, the less that new data points are going to affect the lifetime average. If a portfolio is relatively flat for a year then jumps 1% on the last day of the year, then the portfolio would have a 1% gain for the entire year. If the portfolio is flat for 3 years then jumps 1% ,then the ...


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Let's take a look at a bit of modern portfolio theory and efficient market hypothesis. According to modern portfolio theory, there are individual assets that vary based on risk and return. From these, you can construct an optimal portfolio. It's the one that is on the efficient frontier, and is called "tangency portfolio" because it's the portfolio that is ...


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