The article specifically calls that out as “conventional wisdom.”
“Conventional wisdom suggests that richer individuals put more of their assets toward high risk investments, which can result in higher returns. But our research finds that wealthy people often earn a higher return even on more conservative investments.”
Could this not be explained purely because of access to better funds? For example: Vanguard charges a higher expense ratio on the funds that are under $3000 in investment. Above $3000 you get 'Admiral' class with lower expense ratios. Even above that, there are 'Institutional' class funds that have an even LOWER expense ratio (with minimums of $5M).
I imagine similar examples exist at other firms, companies, etc.
Comments
The article specifically calls that out as “conventional wisdom.”
“Conventional wisdom suggests that richer individuals put more of their assets toward high risk investments, which can result in higher returns. But our research finds that wealthy people often earn a higher return even on more conservative investments.”
Could this not be explained purely because of access to better funds? For example: Vanguard charges a higher expense ratio on the funds that are under $3000 in investment. Above $3000 you get 'Admiral' class with lower expense ratios. Even above that, there are 'Institutional' class funds that have an even LOWER expense ratio (with minimums of $5M).
I imagine similar examples exist at other firms, companies, etc.