Shortfall Risk, Asset Allocation, and Overfunding a Retirement Account
نویسنده
چکیده
This study evaluates the success of the monthly deposit of funds into hypothetical retirement portfolios for the period January 1926 to December 2003. The results of the study indicate that, in general, portfolios with a higher equity portion had a greater likelihood of achieving the desired terminal value. We also find that monthly deposits based on the historical asset class returns generally do not have a high success rate. To achieve a high success rate, investors must overfund a retirement portfolio.
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