Volitility's role in distribution and accumulation
Posted: Sat Feb 19, 2005 5:29 am
JWR
I believe at one time you mentioned examining the role of volitility in portofolios.
If rebalancing causes a penalty thru history depending on valuation, what happens to the ER at various span times?
The classic 'old school?' ala Vanguard as exemplified by the Target Retirement Series says hold your 'high volitility stocks in youth' and gradually damp(add bonds) as you age - the Income Series ending with 20% stock AND 25% Inflation protected.
Heh, heh - my first question is: if I stay at or near the div/interest stream should volitility be discounted. I.e. I assume Vanguard is making assumptions relative to the 'typical retiree'.
So an early retiree with a 30-40 or longer span might be incurring the rebalancing penality of the accumulator -what are the tradeoff's???
Antidotally - the Vanguard examples of their 'advisor cases' don't seem to match what their Retirement Series does i.e. generally advising a higher stock position - ???a show em we're earning our money subconcious bias???
I believe at one time you mentioned examining the role of volitility in portofolios.
If rebalancing causes a penalty thru history depending on valuation, what happens to the ER at various span times?
The classic 'old school?' ala Vanguard as exemplified by the Target Retirement Series says hold your 'high volitility stocks in youth' and gradually damp(add bonds) as you age - the Income Series ending with 20% stock AND 25% Inflation protected.
Heh, heh - my first question is: if I stay at or near the div/interest stream should volitility be discounted. I.e. I assume Vanguard is making assumptions relative to the 'typical retiree'.
So an early retiree with a 30-40 or longer span might be incurring the rebalancing penality of the accumulator -what are the tradeoff's???
Antidotally - the Vanguard examples of their 'advisor cases' don't seem to match what their Retirement Series does i.e. generally advising a higher stock position - ???a show em we're earning our money subconcious bias???