Why is it only a 2 stage horizon? Why do they not factor in (or even mention) the fact that she’s going to have another 750,000 trust distribution in 10 yrs when she is 40? If you’re getting that amount of money you think you would need to rebalance the IPS a bit which would mean a separate time horizon?? I think it’s a 3-stage horizon… 1. Now until 10 yrs to trust distribution 2. Age 40-60 3. post retirement age 60+ Please help me with the logic of this.
time horizon is related to your lifestyle retirement children’s education sell your business these are stages
for examply you pay 10000 for children’s education next year this is a time stage you pay 1000000 for mortgage this isn’t a time stage understand?
Sorry, not really, because I thought time horizon was defined as a significant cash flow that will make you have to re-do your IPS. The reason retirement, children education, house selling defines a stage is because there are significant cash flow movements that will alter your IPS and and return requirements. With that said, why wouldn’t a 750,000 trust distribution be part of it?
house selling is not stage , business selling is stage you can have your own view but CFAI decide the score
i put it down as 3 stage as well. In another CFA paper they put 1 stage or 2 stage both as acceptable answers if explained.