Dedicated Portfolio Theory, in finance, deals with the characteristics and features of a portfolio built to generate a predictable stream of future cash inflows. This is achieved by purchasing bonds and/or other fixed income securities (such as Certificates of Deposit) that can and usually are held to maturity to generate this predictable stream from the coupon interest and/or the repayment of the face value of each bond when it matures. The goal is for the stream of cash inflows to exactly match the timing (and dollars) of a predictable stream of cash outflows due to future liabilities. For this reason it is sometimes called cash matching, or liability-driven investing.
The most recent book on the topic by Huxley and Burns, based on a research project at the University of San Francisco was published in the late 1990s and a book titled Asset Dedication was published in 2005 described how the advances in desktop computers reduced the cost of constructing dedicated portfolios to levels where individual investors could use the concept for personal investing, such as the example below shows for a retirement portfolio. Read More…
Asset Dedication is going to be presenting at the Retirement Income Symposium this year. The symposium is going to be held at the Omni Parker House in Boston, Massachusetts. Feel free to contact us before, during or after the show. Go to the event page…
Asset Dedication is going to be at the Alliance of Cambridge Advisors Annual Conference this year at the Greektown Casino & Hotel in Detroit, Michigan. Feel free to stop by our booth or contact us to setup a time to meet with our team. Read More…
Feeling parched? Income-focused investors are suffering a long drought as Treasury yields scrape along near historic lows and money-market funds and other conservative holdings pay next to nothing. And there’s little relief in sight. The Federal Reserve announced in August that economic conditions would likely warrant “exceptionally low levels” for interest rates at least through late 2014. Read More…
Few technologies have as much potential to be transformative when it comes to improving operational efficiency at advisory firms as document management. Read More…
Recent figures released by the American Institute of Economic Research (AIER) suggest that while the economy’s expansion appears to be continuing for now, its pace may be weakening. Most of the leading indicators were up, but a few declines have begun to show up, and still others are mixed. Read More…
Dedicated Portfolio Theory, in finance, deals with the characteristics and features of a portfolio built to generate a predictable stream of future cash inflows. This is achieved by purchasing bonds and/or other fixed income securities (such as Certificates of Deposit) that can and usually are held to maturity to generate this predictable stream from the coupon interest and/or the repayment of the face value of each bond when it matures. The goal is for the stream of cash inflows to exactly match the timing (and dollars) of a predictable stream of cash outflows due to future liabilities. For this reason it is sometimes called cash matching, or liability-driven investing.
