ES No. 18: Market patterns show that investor expectations do affect portfolio choices. But return-chasing behavior can be costly: up to 5% lower returns than with the traditional buy-and-hold strategy. ES No. 19: Italian and Spanish govt. bond yields are nearly equal to those in the U.S. Does this mean their risk levels are nearly equal? The answer is given in terms of inflation expectations, which are lower for the euro than for the dollar.