EDHEC-Risk Institute, along with the Princeton Operations Research and Financial Engineering Department, are in the process of developing new indices to address the key problems in retirement:
- Level of replacement income in retirement
- Performance of investment strategy invested in a goal-hedging portfolio and performance seeking portfolio
These indices are based on the application of goal-based investing principles to help solve the key retirement problems.
EDHEC has undertaken this initiative because they argue “existing retirement products do not fit with an individual’s actual retirement needs and could be improved by applying Goal-Based Investing principles.”
I agree. There is much work and improvement to be undertaken in this area.
This EDHEC work goes to the heart of my first post around Advancements in Portfolio Management, Mass Customisation Versus Mass Production – How an industrial revolution is about to take place in money management and why it involves a shift from investment products to investment solutions, and Liability Driven Investing.
It is well worth keeping an eye on the EDHEC develops in this area and I hope to make this a continued focus of future blogs.
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