New Whitepaper from Horizon Investments Looks to Redefine “Risk” in the Context of Goals-Based Retirement Planning

Volatility, drawdown and longevity seen as major threats to success

CHARLOTTE, N.C.--()--Redefining Risk: The Revolution Coming to Financial Services, a new whitepaper from leading goals-based investment management firm Horizon Investments, provides a new look at the meaning of “risk” in the context of saving for and spending during retirement.

In the paper, Horizon examines the three stages that characterize retirement-related investment planning – accumulation, protection, and distribution – and defines the respective risks associated with each: volatility, drawdown, and longevity. It notes that volatility risk has a significant behavioral component – the well-known tendency of investors to pull assets out of the market during a downturn, which can undermine long-term returns. Drawdown risk is viewed as a permanent loss of capital that can take place in the period either shortly before or during the distribution stage, making recovery difficult and threatening the investor’s ability to reach his or her retirement goals. Finally, longevity risk is actuarial – the need to fund more years in retirement as life spans increase.

Historically, advisors and investors have looked at retirement planning and portfolio construction in terms of style boxes and Modern Portfolio Theory,” said Robbie Cannon, Chief Executive Officer at Horizon. “These remain important tools, but individuals tend to define risk differently – primarily as their ability to achieve a specific life goal. With a goals-based approach, we’re better able to help investors understand how the risks to their investment strategy change throughout their lives, and to construct portfolios that evolve to address these challenges.”

Horizon develops portfolios designed to help advisors and their clients manage risk throughout the investment journey. The portfolios are global and dynamically managed, offering investors a range of exposures along the risk/reward continuum. The firm offers tools designed to protect against a significant, permanent loss of capital during market downturns through its proprietary Risk Assist® strategy, which is typically utilized during the drawdown and distribution stages.

A goals-based approach to retirement planning recognizes that how an investor gets to his or objective over a lifetime matters, and that factors like volatility and drawdown can significantly impact returns,” added Cannon. “Our strategies and portfolio allocations are designed to address the risks that develop along the stages we have defined. As such, they may vary from what would be seen in a traditional, institutional-like approach. We believe that, taken as a whole, they offer the best way to help individuals get where they want to go.”

About Horizon

Horizon is a leading provider of modern goals-based investment management. With our focus in goals-based investment strategies, we are dedicated to helping financial advisors and their clients improve the investment experience relative to real world, prioritized financial goals. Our investment process balances quantitative expertise with a qualitative perspective, including economic, fundamental and geopolitical analysis. Financial advisors turn to Horizon for the innovative risk mitigation and retirement income strategies we deliver today. Rooted in a global active investment approach, our GAIN PROTECT SPEND® framework, combined with our investment management methodology, has been a cornerstone of Horizon’s portfolio construction process for over a decade.

Contacts

MacMillan Communications
Mike MacMillan/David Savino
212.473.4442
mike@macmillancom.com

Contacts

MacMillan Communications
Mike MacMillan/David Savino
212.473.4442
mike@macmillancom.com