PT  - JOURNAL ARTICLE
AU  - M. Barton Waring
AU  - Laurence B. Siegel
TI  - What Investment Risk Means to You, Illustrated <em>Strategic Asset Allocation, the Budget Constraint, and the Volatility of Spending During Retirement</em>
AID  - 10.3905/jor.2018.1.041
DP  - 2018 Oct 05
TA  - The Journal of Retirement
PG  - jor.2018.1.041
4099  - https://pm-research.com/content/early/2018/10/05/jor.2018.1.041.short
4100  - https://pm-research.com/content/early/2018/10/05/jor.2018.1.041.full
AB  - In our experience, many investment professionals don’t articulate risk well to clients. This research uniquely and graphically reveals the nature of strategic asset allocation investment risk not only for single-period investors, but also for multi-period investors such as those whose savings are held for retirement. Using Monte Carlo simulations, we evaluate and picture the nature of that multi-period consumption risk with spending rules that are subject to a budget constraint and those that aren’t (such as the 4% rule). Risk in a multi-period context means that realized spending may increase with greater SAA risk, but it may instead be worse.