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Bridge over ocean
1 September 2006 Financial Analysts Journal Volume 62, Issue 5

What Is Wealth?

  1. Robert D. Arnott

Whether defined as “fecundity” or “sustainable spending,” the primary goal for investors is to increase the real spending that a portfolio can sustain. A closely related goal is to avoid shocks that jeopardize that future real spending. When sustainable real spending is the measure, a portfolio of “all asset classes,” but not a balanced U.S. stock/bond portfolio, provides true diversification to see the investor through bull and bear markets.

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