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Umed Saidov, CFA's avatar

Loved the beginning but was a bit surprised by the ending.

Should advice have been:

Construct a bond portfolio to replicate FTSE?

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Joachim Klement's avatar

I don’t really think so. Why invest in bonds that are certain to go down when interest rates rise. By buying equities you at least have a chance of an up market despite higher interest rates.

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Peter Odenthal's avatar

Van Binsbergen, like Koijen, is unafraid to tackle the core assumptions that many of us have held since our university days. This is another good example - - thanks for bringing it to our attention, Joachim!

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Chris van Rijswijk's avatar

Any views on the Australian market in the context of this research?

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Joachim Klement's avatar

Sorry, no, because I know so little about that market that I can’t form an opinion.

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