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The Investor's Clearinghouse from the Alliance for Investor Education (522 words) |
 | For example, a runout contour shows a set of contour lines that indicate the probability of running out of money as withdrawal rates and stock percentages change (the test portfolios are a combination of stocks and bonds). |
| For example, say an investor wants to take no more than a 10 percent risk of running out of money by the end of the 30-year period. |
| By looking at the contour lines, this investor will easily see they can use a withdrawal rate of no more than 3.5 percent if they're 100 percent in bonds or up to 4.4 percent given a 50/50 bond/stock allocation... |
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Investor Definition (225 words) |
| An investor is a person or entity that purchases assets with the objective of receiving a financial return. |
| Generally, an investor has a longer time horizon for achieving a return, which may include regular cash payments from the income the asset generates, capital appreciation from the rise in the asset price, or both. |
| A young investor tends to buy assets with price appreciation potential, because a 25-year-old investor has many years for the asset to appreciate before the funds are needed for retirement. |
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