In your book Lifecycle Investing, you and Ian Ayres recommend that certain investors should use leverage to increase their market exposure when they are young, then ramp down the leverage and eventually shift their portfolio into bonds as their savings increase. Your book states, insightfully, that this approach diversifies the market risk over time.
Assuming a particular investor has chosen to adopt a lifecycle strategy, would it be logical to extend the same principle into the retirement period, and have the investor leverage back up as they spend down the portfolio?
less-right1 karma
In your book Lifecycle Investing, you and Ian Ayres recommend that certain investors should use leverage to increase their market exposure when they are young, then ramp down the leverage and eventually shift their portfolio into bonds as their savings increase. Your book states, insightfully, that this approach diversifies the market risk over time.
Assuming a particular investor has chosen to adopt a lifecycle strategy, would it be logical to extend the same principle into the retirement period, and have the investor leverage back up as they spend down the portfolio?
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