Prof. Gabriela Victoria ANGHELACHE PhD.
Bucharest University of Economic Studies
Lect. Mădălina Gabriela ANGHEL PhD.
“Artifex” University of Bucharest
Marius POPOVICI PhD. Student
Bucharest University of Economic Studies
Abstract
The myth of different choices regarding portfolio composition by taking risks on the long term and on the short term follows to be busted. Whether the opportunity of taking risky decisions regarding investments in the future influences or not short term decisions on risky investiments, especially when retirement is envisaged, always represented a dilemma for those with a short span of life but still investing. Problems like intermediary consumption, exposure to risky investments or differences between young and old investors’ portfolio and time horizon issues, are going to be investigated in this article, finding a solid answer by means of mathematical modelling.
Key words: taking risk, planning horizon, risky stock, investment problem, absolute risk tolerance, budget constraint, state price per unit of probability, risk-free rate, investment dynamics
