Ability to take risk- Tricky question --2

Zidane is now 60 years old … He has got a significant financial capital with large capital base… He wishes to retire … There is no other means of meeting the living expenses (which are modest say 4-5%) except the return from Portfolio… What is the ability to take risks?? Average or Above avergae? There r three determinants… 1. long time horizon 2. Large asset base and modest requirements 4-5% 3. Portfolio the only means to meet the living expenses. I would again go with Average…as the portfolio is the only means of income. Guys what do u say ?? pls dont say average to above average … We have to circle one option…

Average should work. In case there’s a problem, it may be possible to - 1. Deplete the principal 2. Cut back on expenses. however, the key thing here is if medical insurance is covered. If not, based on his health it may be below-average.

I am very confused about the distinguishing line between Average and below/above avg…

i would go with above average. Long time horizon (20 years from retirment till death…or at least 15) indicates above average moderate liquidity needs of 4% - 5% per year indicates average tolerance large asset base relative to spending needs indicates above average so based on this, i would say above average.

I agree with strikershank.

i’d say average because: 3. Portfolio the only means to meet the living expenses. so requirements are 4-5%, add in inflation and required return is ~7% per annum And he still has to live off of these funds…so i’d give him an average…

I would go with Average also due to the income requirement…but who the heck knows anymore…

Depends on his asset base, but since you say 4-5% for expenses, I’m assuming we’re not talking $100 million or anything like that. If I had to pick average or above, I would say average. You could even make a case for below average given that he has no other income and is old enough that his portfolio can’t recoup large losses if he incurs them. Definitely not above average.

4-5% real returns on top of ~3% inflation are not all that low, and the importance of that goal means I think risk tolerance is average