Naive Diversification Strategies in Defined Contribution Saving Plans

@article{Benartzi2001NaiveDS,
  title={Naive Diversification Strategies in Defined Contribution Saving Plans},
  author={S. Benartzi and R. Thaler},
  journal={The American Economic Review},
  year={2001},
  volume={91},
  pages={79-98}
}
There is a worldwide trend toward defined contribution saving plans and growing interest in privatized Social Security plans. In both environments, individuals are given some responsibility to make their own asset-allocation decisions, raising concerns about how well they do at this task. This paper investigates one aspect of the task, namely diversification. We show that some investors follow the "1/n strategy": they divide their contributions evenly across the funds offered in the plan… Expand
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