Energy Stocks as a Separate Portfolio Allocation
William W. Jennings
U.S. Air Force Academy - Department of Management
August 4, 2010
I examine energy stocks in the context of a diversified investment portfolio. Several factors – the importance of the energy sector, their potential to hedge energy risks, growing interest in real assets, as well as anecdotes of sophisticated investors focusing on energy investments – motivate this look at energy stocks. I demonstrate that a separate allocation to energy stocks enhances portfolio efficiency and hedges against inflation and inflation surprises.
Number of Pages in PDF File: 24
Keywords: portfolio choice, mean-variance optimization, asset allocation, endowment investing, energy investing
JEL Classification: G11, L31, L71, N50, Q40working papers series
Date posted: June 19, 2010 ; Last revised: August 9, 2010
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