Traditional Financial Planning
- Invests in a mix of bonds and stocks
- Belief that stocks are more risky than bonds, but return more
- As an investor ages, the % of equities is adjusted down an the % of bonds is increased
- idea is that older investors should have less risk and more income generation
- younger investors can better tolerate risk and get more growth since they have more time
- Also relies on indexing vs. stock picking and alpha
- The strategy seems to work well as long as markets go up
- The traditional model is popular with automated Robo Advisors