RT Journal Article SR Electronic T1 Growing Old Gracefully JF The Journal of Wealth Management FD Institutional Investor Journals SP 20 OP 24 DO 10.3905/jwm.2000.320369 VO 2 IS 4 A1 Tracey McNaughton A1 John Piggott A1 Sachi Purcal YR 2000 UL https://pm-research.com/content/2/4/20.abstract AB The authors set out to deal with the question of the relationship between portfolio risk exposure and age, contracting risk constancy with systematic gradual risk reduction. They take issue with a conclusion offered by Paul Samuelson in the Fall 1994 issue of the Journal of Portfolio Management, arguing that his intuitive account of the “escrow” argument for age-phasing is misleading because it ignores the impact of the differential between risky and safe rates of return on the size of the overall accumulation. They explain with a numerical simulation that, far from age-phasing holding in general, the opposite is more likely to be true - escrow is likely to lead an investment strategy in which the proportion in risky assets increases over the life cycle. The age-phasing result will be generated on only a small number of cases where, over a life cycle, safe rates returns. They also demonstrate that for most of us, who accumulate our assets through the working phases of life, financial age-phasing may be a consequence of a savings rule. Financial planners who urge age-phasing may be advocating constant equity exposure after adjusting for the financial portfolio effects of a saving through time.