Putnam Investments CEO Robert Reynolds spoke about the notion of "lifetime financial product allocation" at a recent industry conference.
Reynolds supports the notion of a range of products over the course of one's lifetime that include:
- Lifetime income options to hedge against longevity risk.
- Relative return strategies to hedge inflation risk.
- Absolute return strategies to deal with both inflation and volatility risk (sequence of returns risk).
Reynolds offered comments on the over-reliance on index and passive investment strategies that have proved to be harmful to many retirees and near-retirees over the past couple of years:
“Index funds and other passive investments that track benchmarks are guaranteed to lose value when the markets they track sink, as we saw happen to the investments of many workers last year,” Reynolds said. “People in or near retirement are not well served by too-great a concentration of passive investments, thinking they are a protection against a downturn.”
Source: Bank Investment Consultant
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