Managing risk

Lifestyle investing has rapidly become the most popular investment choice in the US. The evidence is compelling: According to official figures, funds using this approach held $8bn in assets in 2001. By November 2006, assets had reached $109bn and this value continues to increase steadily. It's not difficult to see why this approach is so popular. Major studies have identified asset allocation as the driving force behind efficient investment performance. The concept is simplicity itself: It aims to avoid the twin risks of excessive caution early in life and excessive risk taking later in l...