Junk Science from the CFA Institute

The CFA Institute offers:

Your ability to tolerate risk should be determined by your personal financial circumstances, your investment time horizon, and the size of an investment in the context of your portfolio. Frame dependence is a concept that refers to the tendency to change risk tolerance based on the direction of the market. For example, your willingness to tolerate risk may fall when markets are falling. Alternatively, your risk tolerance may rise when markets are rising. This often causes the investor to buy high and sell low.

Who still pretends markets are efficient, imagines buy and hold as a panacea, believes index investing is Shangri-La and that The Fed has your best interest at heart? Don’t look behind the curtain. No need to ever worry about anything…

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