Investing Research Articles

Can investors improve long-term retirement portfolio outcomes by targeting equity factor premiums in their stock allocations? In his April 2023 paper entitled “How Targeting the Size, Value, and Profitability Premiums Can Improve Retirement Outcomes”, Mathieu Pellerin investigates whether stock portfolios that target size, value and profitability factor premiums better sustain retirement spending and generate larger… Keep Reading

Are there easily implementable life cycle investing strategies reliably superior to the conventional glidepath from equities toward bonds? In their June 2013 paper entitled “The Glidepath Illusion… and Potential Solutions”, flagged by a subscriber, Robert Arnott, Katrina Sherrerd and Lillian Wu summarize flaws in the conventional glidepath approach and explore simple alternatives that address some… Keep Reading

…retirees may be able to achieve both higher spending allowances and lower probabilities of portfolio exhaustion by allocating part of their portfolios to a safe core and the balance to a growth-tilted stocks-bonds mix.

What initial retirement portfolio withdrawal rate is sustainable over long horizons when, as currently, bond yields are well below and stock market valuations well above historical averages? In their June 2013 paper entitled “Asset Valuations and Safe Portfolio Withdrawal Rates”, David Blanchett, Michael Finke and Wade Pfau apply predictions of bond yields and stock market… Keep Reading

What are optimal allocations during retirement years for a portfolio of stocks and bonds, without and with a trend following overlay? In their March 2019 paper entitled “Absolute Momentum, Sustainable Withdrawal Rates and Glidepath Investing in US Retirement Portfolios from 1925”, Andrew Clare, James Seaton, Peter Smith and Steve Thomas compare outcomes across two sets… Keep Reading

Does a constant real annual withdrawal rate of 4% of household savings at retirement, derived from U.S. asset return experience, really protect against financial ruin? In their September 2022 paper entitled “The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets”, Aizhan Anarkulova, Scott Cederburg, Michael O’Doherty and Richard Sias consider data from… Keep Reading

Does adjusting stocks-bonds allocations according to trend following rules improve the performance of 30-year retirement portfolios? In their November 2016 paper entitled “Applying a Systematic Investment Process to Distributive Portfolios: A 150 Year Study Demonstrating Enhanced Outcomes Through Trend Following”, Jon Robinson, Brandon Langley, David Childs, Joe Crawford and Ira Ross compare retirement portfolio performances for variations of the following… Keep Reading

How can retirees optimally segregate reliable income from risky growth? In their November 2011 paper entitled “The Floor-Leverage Rule for Retirement”, flagged by a subscriber, Jason Scott and John Watson examine a retirement allocation strategy that strictly segregates safe income-generating assets (“riskless” bonds) from potentially income-boosting risky assets (stocks). They designate the safe allocation as… Keep Reading

How should investors think about the interactions between working years (retirement account contributions) and retirement years (retirement account withdrawals)? In his June 2020 paper entitled “Retirement Planning: From Z to A”, Javier Estrada integrates working and retirement periods to estimate how much an individual should save and how they should invest to achieve a desired… Keep Reading

Does the conventional wisdom of a declining allocation to stocks throughout retirement really work best? In their September 2013 paper entitled “Reducing Retirement Risk with a Rising Equity Glidepath”, Wade Pfau and Michael Kitces explore alternative stocks-bonds allocations during retirement. They consider retirees planning for annual withdrawals of an inflation-adjusted 4% or 5% of retirement date… Keep Reading