livscykportfölj

A livscykelsportfölj, or life-cycle portfolio, is an investment strategy that adjusts the asset allocation over an investor's lifetime. The core principle is that risk tolerance and investment goals change as an individual ages. Generally, a life-cycle portfolio starts with a higher allocation to growth-oriented assets, such as stocks, during younger years when there is a longer time horizon to recover from market downturns. As the investor approaches retirement or other financial goals, the portfolio gradually shifts towards more conservative assets, like bonds and cash, to preserve capital and reduce volatility.

The specific construction of a life-cycle portfolio can vary. Some are designed with pre-set glide paths that automatically rebalance the portfolio at predetermined intervals or based on age. Others are more dynamically managed, with adjustments made based on market conditions and individual circumstances. The aim is to strike a balance between growth potential and risk management, ensuring that the portfolio remains aligned with the investor's evolving needs and capacity for risk. This approach is often seen in retirement plans, such as 401(k)s, where target-date funds are a common example of a life-cycle portfolio. The underlying idea is to simplify investment decisions for individuals by providing a diversified and automatically adjusting investment solution.