For an especially risk-averse retiree, it may allow acceptance of a more risky portfolio.
If the market stays in bullish territory, this risky portfolio will, in all likelihood, continue to outperform.
The result was a super-risky portfolio of compounds that failed one after another in the late 1990s.
This would allow a risky portfolio to be liquidated at a predictable pace and cost should prices fall in response to a drying-up of liquidity.
The eve of your retirement is definitely not the best time to have a risky, undiversified portfolio.
Just as minimal diversification makes any investment portfolio more risky, a maker of laundry detergent, cosmetics or soft drinks could be flirting with danger when a high percentage of sales are pushed through a single retailer.
He then examined the relationship between growth and shareholder returns using a measurement known as Jensen's alpha, which represents the difference between a company's stock performance and the return of a diversified portfolio of risky stocks.
And the big test is yet to come: how risky Chase's loan portfolio turns out to be when the American economy stops growing, as one day it must.
The bank claims not: it points out that The Money Store's loan portfolio is less risky than it may appear, as most of the business and student loans carry government guarantees.
More than 100 closed-end funds are trading at discounts to net-asset value of more than 20.0%, though most of them are leveraged, meaning they borrow money to amplify their returns, a risky strategy if disaster strikes the portfolio.
The loans and assets up for grabs in the large-portfolio deals are admittedly risky, private-equity leaders say, and some deals have been too hairy for investors' taste leading some of the most seasoned firms to walk away after starting due diligence.
Because a bucket strategy redistributes funds among buckets rather than rebalancing, it shifts the overall portfolio to a traditionally less risky allocation compared to that in a target date fund.
If you decide you can accept some risk, you can balance the riskier elements of your portfolio with a selection of less risky, more easily accessible investments.
Then it was noticed that a diversified portfolio of shares was a lot less risky than most people thought and delivered superior returns over the long term.
Second, undo the effects of uncertainty on the portfolio side, and help recycle the funds towards risky assets.
You are buying weakness to a value level and selling strength to a risky level capturing volatility as you maintain your core positions in your portfolio.
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The CAPM theory assumed that the portfolio would hold an amount of risk free assets plus it would embrace all risky assets weighted by their market capitalization.
Similarly, a portfolio can be cultivated along the way without taking on a time-consuming or potentially risky active strategy.
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