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Absolutely! Our opinion is that good investing principles don’t depend on age or station in life - they simply need to be aligned with your personal risk tolerance and liquidity needs. There is some slightly antiquated conventional wisdom that the best way to invest is to start buying more "income producing" assets the older you get (the so-called “glide path” or “target date” approach), but this usually means that you wind up with a fairly imbalanced portfolio that is almost all stocks in the beginning and then heavy on high-dividend / fixed-income towards the end. We think a better approach is to first think about your near-term liquidity needs and keep that money in short-dated fixed income or cash. Once your living expenses / emergencies are covered, you should build the best portfolio you can that does well in all environments. If your risk tolerance is not very high and your cash needs are proximate - which is often the case for retirees - you may wind up with a fair amount only invested in cash / money market / short-term fixed income, but this is absolutely fine! The important thing is that your risk-taking portfolio, whatever size it may be, is well diversified and balanced to macroeconomic drivers.
For a detailed walkthrough of how to use the Portfolio Optimizer, see the tutorial here.
PortfolioPilot, powered by Global Predictions technology, is an AI Financial Adviser that provides investors with hedge fund inspired insights to improve your portfolio and net worth. We have built the product to be easy to use and suitable for all investors. This portfolio management platform simultaneously helps guide you to improve returns, decrease risk, and diversify investments with features like personalized recommendations, simulations, fee optimization, and expected performance optimization. Global Predictions’ goal is to provide investors with high-quality, easy-to-use quantitative wealth management tools focused on top-down, macro insights to improve long-term portfolio performance.
Our system uses Global Predictions’ comprehensive Recommendation Engine to connect your portfolio and investor preferences with changes in the global economy. The engine is built upon tens of thousands of data streams, providing investors with personalized insights, portfolio simulations, optimization, and risk exposure. To help investors intuitively understand their performance, we calculate a Portfolio Score by matching your preferred risk with your portfolio's current risk, computing your risk-adjusted expected returns, and understanding your portfolio's downside protection across 10 key exposures.
To learn more about our models and data streams backing the Recommendation Engine, click here.
The Portfolio Score is PortfolioPilot's proprietary method of objectively calculating how good a given portfolio is. We find it extremely useful as a "North Star" to guide your investment process and the system uses it to globally optimize your portfolio. It is calculated by taking into account: 1) how your portfolio's risk matches your current risk, 2) your investments' overall risk-adjusted retruns (calculated using the Sharpe Ratio), and 3) your portfolio's Downside Protection to various macroeconomic factors. like inflation. After making changes to your portfolio, the Portfolio Score will be updated to reflect how your changes will impact your portfolio.
Here is a tutorial that goes into more depth.