Risk aversion and investment (for altruists)

Abstract

Altruists should be risk neutral in their investments, as their overall contribution is small compared to the total charitable funding available. Market performance affects all investors equally, so the risk of any individual investor is well-correlated with the market. Therefore, altruists should not attempt to diversify their portfolios. However, certain opportunities may offer uncorrelated risks, which could be attractive to altruists. – AI-generated abstract.