04-26-2016, 02:06 PM
The widely used Modern Portfolio Theory stresses maximizing year to year total returns through balancing investment returns and risks. However, this method was never supposed to be used by a household.
A much better method is using asset-liability matching. Instead of a goal of maximizing total returns, the target is to cover spending with reliable cash flow. While the below article suggests using annuities and bonds, this can also be done with stable dividends paying blue chips.
http://www.forbes.com/sites/wadepfau/201...cb1d526d09
A much better method is using asset-liability matching. Instead of a goal of maximizing total returns, the target is to cover spending with reliable cash flow. While the below article suggests using annuities and bonds, this can also be done with stable dividends paying blue chips.
http://www.forbes.com/sites/wadepfau/201...cb1d526d09