type="main" xml:lang="en" <p>This article analyses and quantifies the costs of suboptimal decision making for an investor with a multi-period horizon. In light of the empirical evidence that investors are too conservative and hold portfolios that are insufficiently diversified, we evaluate the...</p>

This paper discusses the factors that led up to the stock price bubble of the 1990s. Foremost among these, it is argued, was the conventional view that stocks are the investment of choice for the long-run investor regardless of their price. This conventional view was based on a misunderstanding...