Document Type
Article
Language
eng
Format of Original
32 p.
Publication Date
Winter 2001
Publisher
Academy of Financial Services
Source Publication
Financial Services Review: the Journal of Individual Financial Management
Source ISSN
1057-0810
Original Item ID
doi: 10.1016/S1057-0810(01)00072-5
Abstract
This paper demonstrates the dramatic effect of social security wealth on individuals’ asset allocation. We first discuss why social security wealth should be included in portfolio asset-mix decisions. We then draw parallels between social security benefits and inflation-indexed treasury bonds to help quantify the present value of social security benefits. Finally, we show the portfolio impact of including social security wealth under several asset-mix decision rules. Excluding social security wealth from the asset mix decision results in sub-optimal portfolios. Including social security wealth provides an incentive for including more stock in the asset mix.
Recommended Citation
Fraser, Steve; Jennings, William; and King, David, "Strategic Asset Allocation for Individual Investors: The Impact of the Present Value of Social Security Benefits" (2001). Management Faculty Research and Publications. 27.
https://epublications.marquette.edu/mgmt_fac/27
Comments
Published version. Financial Services Review, Vol. 9, No. 4 (2001): 295-326. DOI. © 2001 Academy of Financial Services. Used with permission.
Article written when authors were employed by the US Government.