Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JWM
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • LinkedIn
  • Twitter

User menu

  • Sample our Content
  • Subscribe Now
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Wealth Management
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Subscribe Now
  • Log in
The Journal of Wealth Management

The Journal of Wealth Management

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JWM
    • Editorial Board
    • Published Ahead of Print (PAP)
  • LinkedIn
  • Twitter
Article

Quantifying Downside Risk in Goal-Based Portfolios

Franklin J. Parker
The Journal of Wealth Management Winter 2014, 17 (3) 68-77; DOI: https://doi.org/10.3905/jwm.2014.17.3.068
Franklin J. Parker
is managing director of CH Wealth Management, LLC in Dallas, TX.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: franklin.parker@chwealth.com
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Click to login and read the full article.
Don’t have access? Sign up today to begin your trial to the PMR platform 

Abstract

In this article, an alternate paradigm for quantifying downside risk for the retail investor is proposed. It is the goal of this paradigm to provide concrete tools to the retail financial advisor and investor that can be used to understand portfolio risks within a financial planning context. Rather than utilizing general risk metrics, which can be difficult to communicate and make specific, this article proposes risk metrics which are made specific to an investor’s portfolio and understood in the context of the investor’s financial plan. The objectives of this proposed paradigm are fourfold: 1) to provide a required rate of return for a portfolio within the context of a financial planning goal; 2) to create an expectation for a range of portfolio returns over time; 3) to calculate a maximum sustainable loss for a portfolio, defined as the amount of portfolio losses which would cause material change to the investor’s plan; and to develop a strategy for hedging away those excessive losses identified. Also proposed are tools for achieving these objectives: 1) the Modified Required Rate of Return; 2) the Maximum Sustainable Loss; and 3) a Range of Returns by Portfolio Allocation table.

  • © 2014 Pageant Media Ltd
View Full Text

Don’t have access? Register today to begin unrestricted access to our database of research.

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Wealth Management: 17 (3)
The Journal of Wealth Management
Vol. 17, Issue 3
Winter 2014
  • Table of Contents
  • Index by author
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Wealth Management.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Quantifying Downside Risk in Goal-Based Portfolios
(Your Name) has sent you a message from The Journal of Wealth Management
(Your Name) thought you would like to see the The Journal of Wealth Management web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Quantifying Downside Risk in Goal-Based Portfolios
Franklin J. Parker
The Journal of Wealth Management Oct 2014, 17 (3) 68-77; DOI: 10.3905/jwm.2014.17.3.068

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Quantifying Downside Risk in Goal-Based Portfolios
Franklin J. Parker
The Journal of Wealth Management Oct 2014, 17 (3) 68-77; DOI: 10.3905/jwm.2014.17.3.068
del.icio.us logo Digg logo Reddit logo Twitter logo CiteULike logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
    • Abstract
    • DEFINING “RISK” IN GOAL-BASED PORTFOLIOS
    • FEAR OF DERAILMENT
    • EFFECTS OF OVER/UNDERPERFORMANCE ON DOWNSIDE TOLERANCE
    • RISK SATIATION
    • PUTTING IT ALL TOGETHER
    • AT THE END OF THE DAY…
    • ENDNOTES
    • REFERENCES
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • The Efficient Frontuzzle: What Investment Risk Profiling Still Fails to Solve
  • Google Scholar

More in this TOC Section

  • Well-Being Advisers
  • Editor’s Letter
  • Editor’s Letter
Show more Article
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • LinkedIn
  • Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2021 Pageant Media Ltd | All Rights Reserved | ISSN: 1534-7524 | E-ISSN: 2374-1368

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy