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Rekenthaler Report

Why Not 100% Equities?

Revisiting a 20-year old suggestion.

One Basket, One Egg
In 1994, two professors, Richard Thaler and J. Peter Williamson, asked the question: Why not put it all into stocks? Their query was more than a mere academic exercise, as the article, "College and University Endowment Funds: Why Not 100% Equities?," was published in a journal aimed at institutional investors, The Journal of Portfolio Management. The authors intended to be provocative, but they also believed they were raising a serious point.

For the most part, their effort earned hoots from financial advisors and the general press. The argument smacked of bull-market optimism; it seemed the sort of thing that cocky people wrote late in a market cycle. Besides, it wasn’t practical. Who could withstand the full, unalloyed impact of a stock-market crash? Not many of the advisors’ clients, nor the press’ readers, either.