Retirement Investment Planning

Uznadze Ana (2021) Retirement Investment Planning. Pénzügyi és Számviteli Kar.

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Absztrakt (kivonat)

In this paper, I want to demonstrate the importance of planning for retirement, different investment strategies, how to create and manage individually customized portfolios, and the ways to hedge the risks against them. In the first part of my thesis, I will discuss the 3L Wealth Model strategy. This strategy helps individuals and families understand how to correctly allocate their assets in the portfolio, mitigate the risks and achieve certain financial goals for retirement. After discussing traditional investment strategies, I analyze the importance of asset allocation. With the help of compound interest calculations on different compounding frequencies (annual, quarterly, monthly, weekly, and daily) we prove that it is more profitable and promises higher rewards to invest rather than save money at a bank, because of the interest gain associated with interest at the end of each period. The more frequent the compounding, the greater will be the effective rates corresponding to each period. The third part of the thesis is focused on optimal strategies for retirement investing. One of the optimal strategies is choosing the plans offered by the employer, one of such is a 401(k) plan. The people who want to decrease the risks of losing because of a single bad bet are advised to invest in mutual funds, because of having a big variety of choices. Some of the funds invest in stocks, bonds, or both at the same time. A good retirement portfolio should be well-diversified and balanced, therefore if you decide to invest via mutual funds, you’re going to need funds that are investing in all the asset classes. I further discuss traditional and ROTH IRAs and different index funds such as S&P 500. In the next section, I am going to judge the reliability of the time diversification and analyze portfolios of 20 different largest global equity markets. Our main focus is estimating the existence of global time diversification and the optimal portfolio allocation for the ones willing to take on the time diversification strategies. In order to ensure that we are properly prepared for retirement, we need to understand the main risks associated with long-term investments. In this part, I mention the risks of outliving your assets, market risk, inflation, health risks, and how to manage them. Lastly, I show the results of the survey I conducted to find out about investment and risk preferences among my peers.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Pénzügyi és Számviteli Kar

Tanszék

Pénzügy Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Pénzügy és Számvitel

Konzulens(ek)

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	financial planning, investment risks, investments, portfolio management, retirement
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2022. Okt. 03. 08:51
Utolsó módosítás:	2022. Okt. 03. 08:51

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