标题: include on-going living expenses in liquidity constraint? [打印本页] 作者: jcole21 时间: 2011-7-13 15:06 标题: include on-going living expenses in liquidity constraint?
I've seen it there at times on some exams and on others it's not there at all. Should you just be safe and put all outflows from the portfolio in the liquidity requirement or only major outflows?作者: cityboy 时间: 2011-7-13 15:07
If the portfolio is to pay living expenses , yes mention it.
If you are covered there e.g. salary after tax matches the living expense , do not mention it, go for bigger things like education needs作者: strikethree 时间: 2011-7-13 15:07
ok so only for outflows from the portfolio? What about if the person wants to give to a charity when they die or 15 years down the road? Does that go in unique circumstances or liquidity?作者: mik82 时间: 2011-7-13 15:07
My inclination is to put it into unique , unless I run out of things to write for liquidity作者: ohai 时间: 2011-7-13 15:07
gotcha. thanks.作者: Chuckrox 时间: 2011-7-13 15:07
The charity piece can even go into "ability to take risk" e.g. 2007 Morning.
They have a charitable objective which they can give up , so higher risk taking ability.
I think you have to stretch the imagination and come up with creative things like that作者: NakedPuts2011 时间: 2011-7-13 15:07
show is correct: u definitely should not include calculation pieces in liquidity I think. Just mention , regurgitate or paraphrase things that look like liquid needs , hopefully one or two outstanding things , no need to think deeply作者: PalacioHill 时间: 2011-7-13 15:07
That's how I feel the show, if it's at death, then leave it out.作者: infinitybenzo 时间: 2011-7-13 15:07
Do you guys have a general statement that you consistently use for these? Obviously they all differ but generally it's either maintain real value of portfolio through retirement or maintain real standard of living through retirement, cover after-tax living expenses on an inflation adjusted basis etc.作者: Analyze_This 时间: 2011-7-13 15:07
U referring to Return objective which can be canned in this manner a la Schweser
For liquidity , I'll go simpler like "Needs $xxx for yyy needs in 3 years " etc.作者: Iginla2011 时间: 2011-7-13 15:07
good one bell作者: susana 时间: 2011-7-13 15:07
so nothing is ever included in return that is not included in liquidity?
return gets living expenses and immediate liquidity needs
liquidity gets long term liquidity needs, living expenses, and immediate liquidity needs作者: ll11 时间: 2011-7-13 15:07
Remember that liquidity is cash oriented or short term oriented
Returns could be rebalancing or total return approach , also could mean an ending value needed e.g TVM calculation given initial , spending and time horizon
Slightly different things implied , even if they arise from same/similar need. In Liquidity part you just state what needs to come out of portfolio ( e.g. if portfolio NOT providing living expense then no Liquidity needed for living expenses)
