While volatility is a part of the “Rate of Return” family, according to the article, it has a huge impact on how one should plan their investing, especially with retirement benefits.
Only looking at an assumed rate of return will mostly likely leave an executive with less money. Buzachero strongly encourages executives to plan for a wide range of rates of return.
In order to address volatility in an executive’s post-retirement investing time frame, Buzachero recommends finding hedges against volatility and rate of return risk. By “collaring” returns between 0-13%, for example, an executive will see more consistent and less volatile returns.
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