This research is related to the newly launched Nebo platform, a portfolio construction tool that helps RIAs build better portfolios. Nebo bridges the gap between financial planning and asset management, and recently won the WealthManagement.com 2022 Industry Disruptor award.
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In this webcast, Ben Inker, James Montier, and Martin Tarlie discuss the genesis of their latest White Paper, "Investing for Retirement III: Understanding and Dealing with Sequence Risk."
Contact Us to Watch the Replay*
*This content is intended for accredited investors only.
- Sequence of returns risk is a meaningful risk for the vast majority of investment portfolios and there are useful tools that can mitigate its effects.
~100 responses to invitation survey
91% response rate–thank you!
*44% replied “Yes”
- We believe a multi-period, shortfall optimization framework that considers a client’s total investment horizon, financial needs, and circumstances accounts for sequence of return risk better than any standard single-period optimization.
- By dynamically reallocating portfolios based on valuation, portfolio managers can substantially further improve outcomes for their clients.
- The Nebo platform asks the right questions with respect to risk, takes into account investment horizon, and aligns the financial plan with the portfolio (see www.nebo-gmo.com for more details).
Start with $1M at age 65, withdraw $50,000* every year
Source: GMO (charts top); Source: Robert Shiller, GMO (table)
*Withdraw $50,000 in real terms, **The stock weights in the Valuation Sensitive Optimal Shortfall results are constrained to lie between 20-percentage-point bands around the Optimal Shortfall stock weights. For the historical backtests, the results for the unconstrained Valuation Sensitive Optimal Shortfall strategy are 0.7% and 18% for the 4% and 5% withdrawal rates, respectively. For the Monte Carlo simulations, the unconstrained results for the 4% and 5% withdrawal rates are 2.7% and 13%, respectively. Historical backtests use Robert Shiller data from 1926-2018. Monte Carlo results are based on 10,000 simulations.
For additional information, please visit our Nebo website at nebo by GMO (nebo-gmo.com).
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