Portfolio choice over the life-cycle: a survey

Gomes, F (2020) Portfolio choice over the life-cycle: a survey. Annual Review of Financial Economics, 12 (1). pp. 277-304. ISSN 1941-1367

Abstract

Life-cycle portfolio choice models capture the role of human capital, housing, borrowing constraints, background risk, and several other crucial ingredients for determining the savings and investment decisions of households. Over the last two decades, this literature has provided us with multiple insights regarding the asset allocation decisions of individual investors. This article provides a critical survey of this research and suggests directions for future research, namely incorporating additional forms of household heterogeneity.