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The View from 10,000 feet: It's All About Interest Rates etftrends.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from etftrends.com Daily Mail and Mail on Sunday newspapers.
SUMMARY Low interest rates and rising life expectancy are two major challenges for Financial Advisors and their clients. In the distribute phase, portfolios will likely need greater exposure to ‘risk assets’ such as stocks and higher yielding bonds to meet return objectives, in our view. Managing those risks is very important when finding the right balance between current income and growth of principal. Clients in Retirement Needing Income In a world where most people do not enjoy the benefit of a guaranteed pension, retirement becomes a personal responsibility. The goal for many investors is to maintain their standard of living in retirement with the peace of mind that their money will not run out. Furthermore, we believe retirees do not want to spend their golden years worrying about the monthly fluctuations in the stock market. ....
Investors in the sustain phase face new challenges. Portfolios will likely need greater exposure to ‘risk assets’ such as stocks and higher yielding bonds to meet return objectives, in our view. We believe understanding and managing those risks is key to finding the right balance between preservation and growth. Balancing ‘Growth’ and ‘Preservation’ Pre-Retirement The ten years leading up to retirement, what we call the ‘Sustain Phase’, can be scary with questions such as: Will I have saved enough to fund my retirement? How can I mitigate the risk that my savings will see a significant decline just before I retire? ....