Personal Pension Plans and Stock Market Volatility

 0 Người đánh giá. Xếp hạng trung bình 0

Tác giả: Max Alier

Ngôn ngữ: eng

Ký hiệu phân loại: 332.63 Specific forms of investment

Thông tin xuất bản: World Bank, Washington, DC, 2014

Mô tả vật lý:

Bộ sưu tập: Tài liệu truy cập mở

ID: 306370

 One of the strongest objections to personal pension plans is that they transfer investment risk to individual workers, who are then exposed to the vagaries of equity and bond markets. Using historical United States data, the authors investigate the impact of the volatility of investment returns on replacement rates in the context of personal pension plans. They find large fluctuations in replacement rates across different cohorts of workers, if undiversified portfolios are used. They then explore a number of simple financial strategies for coping with this problem, including: a) portfolio diversification
  b) a late, gradual shift to bonds
  c) a gradual purchase of nominal or real annuities
  d) a purchase of variable annuities. The first three strategies lower the volatility of replacement rates, but at significant cost in terms of lower replacement rates. The purchase of variable annuities reduces the dispersion of replacement rates across generations without lowering their level - because of the persistence of the equity premium and the fact that the volatility of equity returns is lower, the longer the holding period. Sophisticated financial engineering promises more efficient solutions to this problem, but it may not be feasible to apply it in developing countries (or in developing financial markets). Neither authors' approach nor the more sophisticated financial engineering solutions would be able to deal effectively with persistent deviations of investment returns from long trends. But the authors' findings suggest that overconcern about the impact on replacement rates of short-term volatility in stock markets may not be warranted.
Tạo bộ sưu tập với mã QR

THƯ VIỆN - TRƯỜNG ĐẠI HỌC CÔNG NGHỆ TP.HCM

ĐT: (028) 36225755 | Email: tt.thuvien@hutech.edu.vn

Copyright @2024 THƯ VIỆN HUTECH