Abstract
Asset allocation is widely accepted as a primary driver of portfolio returns over time. Conventional investment practice recommends that investors reduce their risk and thus increase their allocation to fixed-income investments as they approach retirement. This research extends the literature by examining the shape of the fixed-income glide slope prior to retirement. The results suggest that portfolios with high fixed-income allocations, or bond tents, can serve investors well, and nonlinear glide slopes can produce favorable portfolio characteristics for investors.
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