The Contrarian Investor: The glide path to riches

The glide path to riches

The ‘glide path' idea informs not only the intellectual core of most financial planning, but also shapes a large part of investment practice.

What is it? In simple terms, the old adage among wealth advisers has been that an investor should have an equity weighting of 110% minus current age, giving a 55-year old, for example, a 55% exposure to stocks, but a 25-year-old an 85% percent weighting. Yet this conventional wisdom has been under fierce attack in recent years, not least by equity fundamentalist Rob Arnott and his colleagues at Research Affiliates. In a paper called What are we doing to our young investors?, co-authored with Lillian Wu, Arnott takes aim at the beginning of the glide path – young people who are supposed t...