Document Type

Article

Publication Date

3-2008

Publication Title

Journal of Banking & Finance

Volume

32

Issue

3

Pages

393-404

Abstract

The phenomenal growth of individual retirement accounts in the US, and globally, challenges both individuals and their advisors to rationally manage these investments. The two essential differences between an individual retirement account and an institutional portfolio are the length of the investment horizon and the regularity of monthly contributions. The purpose of this paper is to contrast principles of institutional investing with the management of individual retirement accounts. Using monthly historical data from 1926 to 2005 we evaluate the suitability for managing individual retirement portfolios of seven principles employed in institutional investing. We discover that some of these guidelines can be beneficially applied to the investment management of individual retirement accounts while others need to be reconsidered.

Comments

Author Posting. © Elsevier B. V. 2008. This is the author's version of the work. It is posted here by permission of the Journal of Banking & Finance for personal use, not for redistribution. The definitive version was published in the Journal of Banking & Finance, vol. 32, no. 3, 2008, http://www.sciencedirect.com/science/article/pii/S0378426607002737

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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