Constant Dollar Return from Assest Classes

Yesterday my walk was nice. I thought about the relationships between investment returns and investment risks. I was thinking that one should get the same return in dollars from each class of asset. For example, if the stock return is 12% per year and the bond return is 6% per year, then a portfolio contains stocks and bonds should have 2/3 in bonds and 1/3 in stocks. This way, each asset class contributes the same return in dollars.

Later in the day, I met Olina talking about the same idea about constant return in dollars. I realized that the same principle could be applied in real life. Fractional relationships can be established among various people according to their level of appreciations. She did not like this idea, but she could not establish any counter argument.

That’s might be why so many high-valued arts are stored in museum so every can pay a visit at a fractional time. I visited Venus and Mona Lisa in France. That’s was a fractional time experience.