Designing an Investment Trust: Theoretical Foundations
Abstract
This paper deals with a dynamic portfolio with dividends.The portfolio consists of a risky asset and a safe one.Investors initially buy the portfolio and enjoy their consumption based on the dividends over time.During their lifetime, they reinvest the funds after the dividends are paid.In short, investors adopt a strategy of buying and holding.They decide on a portfolio and the dividend rate to maximize their utility in every period, in a series of separate decisions.In this situation, there seems to be a tradeoff between dividends and reinvestment, to the possible detriment of the portfolio.Thus, we focus on establishing an optimal path for dividends.
Fields of Study & Subjects
Stochastic processes and financial applications
Risk and Portfolio Optimization
Financial Markets and Investment Strategies
Publication details
- Journal / source
- Institutional Repositories DataBase (IRDB)
- Volume
- 2601
- Pages
- 1–15
- Publication date
- 1 February 2026
- Language
- EN