The traditional ‘life-styling’ strategy for pension posts reduces the level of investment risk that they take as you get nearer to retirement. Is this a good idea? The research threw up some interesting results.
There is a portfolio construction technique known as a “barbell strategy” which bond traders often use. It involves focussing the portfolio on only very short maturity bonds and very long maturity bonds in order to take advantage of mispricing. So as opposed to putting all of your portfolio in a 10 year bond, you might [...]