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Roger G. Ibbotson; Moshe A. Milevsky; Peng Chen, Kevin X. Zhu - Lifetime Financial Advice

Posted on 2010-07-04




Name:Roger G. Ibbotson; Moshe A. Milevsky; Peng Chen, Kevin X. Zhu - Lifetime Financial Advice
ASIN/ISBN:0943205948
Publisher:Research Foundation of CFA Institute
Publish Date:0943205948
Pages:104 pages
File size:5.76 Mb
Publisher: Research Foundation of CFA Institute
Publish Date: 2007-04-06
ISBN: 0943205948
File Type: PDF
Pages: 104 pages
File Size: 5.76 MB
   Roger G. Ibbotson; Moshe A. Milevsky; Peng Chen, Kevin X. Zhu - Lifetime Financial Advice

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: Human Capital, Asset Allocation, and Insurance

In determining asset allocation, individuals must consider more than the risk-return trade-off of financial assets. They must take into account human capital and mortality risk in the earlier life-cycle stages and longevity risk in the later life-cycle stages. The authors show how to integrate these factors into individual investors' asset allocations through a systematic joint analysis of the life insurance a family needs to protect human capital and how to allocate the family's financial capital. The proposed life-cycle model then addresses the transition from the accumulation to the saving phases-in particular, the role (if any) of immediate payout annuities.

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