RT Journal Article SR Electronic T1 Passive versus Optimized Investing in Retirement Plan Portfolios JF The Journal of Wealth Management FD Institutional Investor Journals SP 48 OP 59 DO 10.3905/jwm.2009.12.2.048 VO 12 IS 2 A1 Jeff Grover A1 Angeline M Lavin YR 2009 UL https://pm-research.com/content/12/2/48.abstract AB This article uses portfolios of Vanguard index funds to study the optimal portfolio allocation strategy for long-term investors who are saving for retirement. The optimization, conducted using both a single-index-hybrid model (SIHM) and the Markowitz–Sharpe optimization method, suggests that in the long run, an optimized allocation strategy will yield cumulative returns equivalent to those of a passive allocation strategy with significantly less risk. In addition, the optimized allocation strategy achieves the favorable risk and reward profile using fewer funds than the passive strategy.TOPICS: Retirement, passive strategies, portfolio construction, performance measurement