The Lifecycle Investment Strategy

The Lifecycle Investment Strategy

The lifecycle theory suggests that investors should start with a higher proportion of higher-risk investments (like stocks)

when they are younger and gradually shift to lower-risk investments (like bonds) as they approach retirement. 원격진료 관련주

This strategy is based on the concept that younger investors can ride out market volatility better than older investors due to their longer investment horizons.

Risk Tolerance and Time Horizon

An investor’s risk tolerance and investment time horizon are pivotal in shaping the asset allocation strategy.

Young investors have the capacity to recover from dips in the market performance, which allows them to pursue more growth-oriented strategies.

As investors age, their ability to recover from financial losses diminishes, necessitating a shift towards more conservative investments.