PT - JOURNAL ARTICLE AU - Robert A. Jaeger AU - Michael A. Rausch AU - Margaret Foley TI - Multi-Horizon Investing: <em>A New Paradigm for Endowments and Other Long-Term Investors</em> AID - 10.3905/JWM.2010.13.1.032 DP - 2010 Apr 30 TA - The Journal of Wealth Management PG - 32--42 VI - 13 IP - 1 4099 - https://pm-research.com/content/13/1/32.short 4100 - https://pm-research.com/content/13/1/32.full AB - Investors do not have a single investment horizon; they have multiple investment horizons at the same time. Every long-term investor is, therefore, also a medium-term investor and a short-term investor. This fact has important implications for asset allocation and portfolio optimization. The total portfolio should be viewed as an aggregation of multiple sub-portfolios, each of which has a different investment horizon. The different sub-portfolios have different investment objectives, different expected returns, different liquidity requirements, and may even be based on different capital market assumptions. The size of each sub-portfolio is determined by the spending requirements of the investor. In this framework, risk is not standard deviation but “expected loss,” that is, the probability of loss (either in nominal terms, after inflation, or after inflation and spending) multiplied by the amount of the loss.TOPICS: Foundations &amp; endowments, portfolio construction, risk management