“Advisors manage portfolios to achieve a desired result within a specific time frame. Equity exposure over a market cycle remains an important part of the portfolio equation. Real life tells us that, for many investors, waiting out a full market cycle becomes more challenging as retirement nears.
“BlackRock estimates that nearly 75 percent of investable assets in the U.S. will be in the hands of preretirees and retirees by 2020. Needs shift in retirement from growth to income. That’s a lot of money that lacks the time needed to overcome a significant equity market decline.
“That’s a tall order for the retiree with fixed-income yields at just 2.22 percent—today’s [Sept. 10, 2015] 10-year Treasury yield. Portfolios need to provide income and outpace inflation.