Decisions, Stocks, and Time Diversification
21 Pages Posted: 9 Nov 2012 Last revised: 22 Jul 2013
Date Written: July 22, 2013
This paper presents three definitions of time diversification and analyzes their implications for investment horizons. Using decision quality criteria and methodology, we question standard advice. In analyzing time diversification with a minimum of assumptions, we answer two main questions: how to rigorously define time diversification and what conditions favor it.
Keywords: asset management, time diversification, decision theory, decision quality
JEL Classification: G11, G02
Suggested Citation: Suggested Citation