Investment Principles for Individual Retirement Accounts

32 Pages Posted: 27 Dec 2007 Last revised: 26 Aug 2008


The phenomenal growth of individual retirement accounts in the U.S., and globally, challenges both individuals and their advisors to rationally manage these investments. The two essential differences between an individual retirement account and an institutional portfolio are the length of the investment horizon and the regularity of monthly contributions. The purpose of this paper is to contrast principles of institutional investing with the management of individual retirement accounts. Using monthly historical data from 1926 to 2005 we evaluate the suitability for managing individual retirement portfolios of seven principles employed in institutional investing. We discover that some of these guidelines can be beneficially applied to the investment management of individual retirement accounts while others need to be reconsidered.

Keywords: Individual Retirement Accounts, Risk and Return, Investment Management, Risk Management of Individual Retirement Accounts

JEL Classification: G10, G11

Suggested Citation

Malliaris, A. (Tassos) G. and Malliaris, Mary, Investment Principles for Individual Retirement Accounts. Journal of Banking and Finance, Vol. 32, pp. 393-404, 2008, Available at SSRN:

A. (Tassos) G. Malliaris (Contact Author)

Loyola University Chicago ( email )

16 E. Pearson Ave
Quinlan School of Business
Chicago, IL 60611
United States
312-915-6063 (Phone)

Mary Malliaris

Loyola University Chicago ( email )

16 East Pearson Street
Chicago, IL 60611
United States
312-915-7064 (Phone)

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