PT  - JOURNAL ARTICLE
AU  - Murad J. Antia
TI  - Volatility Management and Wealth Creation: <em>A Long-Term Perspective</em>
AID  - 10.3905/jwm.2011.14.3.027
DP  - 2011 Oct 31
TA  - The Journal of Wealth Management
PG  - 27--32
VI  - 14
IP  - 3
4099  - https://pm-research.com/content/14/3/27.short
4100  - https://pm-research.com/content/14/3/27.full
AB  - Investors may not understand the wealth-destroying implications of their investment decisions, because of the deleterious effect of volatility of returns on wealth creation. Managing the volatility of returns is integral to creating long-term wealth. The methodology presented quantifies the single-period risk-and-return tradeoff that investors need to be aware of to create long-term wealth. Practitioners can use it as a tool to educate clients about the wealth-creating benefits of diversification. Economic sector return data is used to demonstrate that underdiversified portfolios, as opposed to diversified portfolios, inhibit long-term wealth creation, because of the volatility drag associated with underdiversified portfolios.TOPICS: Wealth management, risk management, portfolio construction