Step 12: Invest & Relax
5. Take less risk during the drawdown phase 6. Use glide path (steadily decreases risk over time) Figure 12-4 depicts the results of a portfolio simulation for an individual with a retirement age starting at 67. The green and gold bars represent the probability of the portfolio surviving through various ages. A portfolio survival simulation is a valuable tool for investors to use for establishing a degree of confidence about the sustainability of their portfolio through their lifetime. Revisiting the retirement analyzer each year allows investors to make sure they are on course â€” much like an onboard navigation system for a car. The closer one gets to their destination, the more finely tuned the directions become. Figure 12-4
Published on Jun 1, 2015
This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...