The last Fed meeting of the year is upon us, as 2023 highs for stock markets just keep coming. Can the Fed keep those fires burning? It all depends on what Chair Jerome Powell and the dot plot have to say about future rate expectations. Away from the fray, our call of the day turns a classic piece of investment advice on its head as it says the balanced portfolio plan is bunk and stocks alone can build retirement wealth.
“Given the sheer magnitude of U.S. retirement savings, we estimate that Americans could realize trillions of dollars in welfare gains by adopting the all-equity strategy,” said Emory University Ph.D finance candidate Aizhan Anarkulova, and finance professors, University of Arizona’s Scott Cederburg and University of Missouri at Columbia’s Michael S. O’Doherty. In their recently published research paper, they challenge the basic premise of so-called life cycle investing that dictates diversification between stocks and bonds, and the young holding more equities than the old. They used a data set of 38 countries and nearly 130 years of data and ran one million computer-generated simulations on American households, based on four potential retirement outcomes: wealth at retirement, retirement income, savings and money at death. Their findings: “An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock …
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“Given the sheer magnitude of U.S. retirement savings, we estimate that Americans could realize trillions of dollars in welfare gains by adopting the all-equity strategy,” said Emory University Ph.D finance candidate Aizhan Anarkulova, and finance professors, University of Arizona’s Scott Cederburg and University of Missouri at Columbia’s Michael S. O’Doherty. In their recently published research paper, they challenge the basic premise of so-called life cycle investing that dictates diversification between stocks and bonds, and the young holding more equities than the old. They used a data set of 38 countries and nearly 130 years of data and ran one million computer-generated simulations on American households, based on four potential retirement outcomes: wealth at retirement, retirement income, savings and money at death. Their findings: “An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]