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Recommendations On Asset Allocations For 20 Year Investment - Research Paper

Recommendations On Asset Allocations For 20 Year Investment

Thank you for choosing Risk Averse Consulting Company to advise you in your financial investment strategy. To summarize, you have indicated that you have $10,000 per year that is available for investment and you plan on retiring in 20 years. You have indicated that you are concerned about the downside risk of an equity-based portfolio although there may be a high rate of return. I hope that we can help you come to a decision based on several logical factors that we have prepared for you below.
Figure 1-1 shows a graphical representation of the performance of stocks, bonds and T-bill for a twenty-year period assuming a yearly investment of one dollar per year. This rate of return ...

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much lower 2.5% maximum ROR that has not been prevalent until the past few years. Bonds have consistently had negative ROR’s until recently when the trend seems to be following stocks. Analysis of 3 and 10-year investment time frames emphasize the importance of the period that the investment is made over. Three and ten year investments yielded a large difference for stocks and very similar results for both bonds and T-bills.
Modern statistical analysis shows us that there is statistical significance to the difference between the ROR’s and risk of stocks, bond and T-bills. This is an important analysis to understand, because sometimes when dealing with large amount of data it is easy to come to the wrong conclusion unless these means are employed. Risk for an investment is defined as a measure of dispersion (standard deviation) of the samples of data analyzed. Average ROR and risk for stocks, bonds and T-bills for the twenty-year investment period are documented in Table ...

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Recommendations On Asset Allocations For 20 Year Investment. (2008, May 19). Retrieved April 29, 2024, from http://www.essayworld.com/essays/Recommendations-Asset-Allocations-20-Year-Investment/83889

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"Recommendations On Asset Allocations For 20 Year Investment." Essayworld.com. May 19, 2008. Accessed April 29, 2024. http://www.essayworld.com/essays/Recommendations-Asset-Allocations-20-Year-Investment/83889.

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PAPER DETAILS

Added: 5/19/2008 06:33:03 AM
Category: Economics
Type: Free Paper
Words: 450
Pages: 2

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