What are the factors that could affect the ability to take risk?
1, time horizon
2, portfolio size
3, liquidity need
…
Please add more.
What are the factors that could affect the ability to take risk?
1, time horizon
2, portfolio size
3, liquidity need
…
Please add more.
flexibility
Here are more, some are from my notes:
* age (young+) * stable job (+) * healthy, no debt, no children (+) * modest living standard (+) * inheritance, lottery prize, other windfalls(+) * pension and health care supported by government(+) * uncertainty about kids’ college educations(-) * mortgage payment(-) * high living standard(-) * small portfolio size(-) * concentrated stock(-) …
hehe such a long list tulkuu,
for me the more salient issaue is comparing after tax cf needs with asset base…
For DB plans,
The financial health of the sponsor;
The ratio of active lives to retired lives;
The size of the surplus.
For individuals, don’t forget to evaluate human capital (is it “bond like”).
What % do you use as a cutoff?