Table 7. Portfolio management transitions and equity choice over the life cycle with a delegation option.

This table illustrates investors’ life cycle patterns of portfolio management methods and equity shares when delegation is feasible. Panel A shows the fraction of investors selecting inertia, active management, or delegation, by age. Panel B traces transitions across portfolio management methods, given a delegation option. Panel C depicts the average fraction of savings invested in equities depending on whether the investor elects inertia, active management, or delegation. Savings refer to total wealth minus consumption. Averages are generated from 2,000 independent simulations for individuals based on optimal feedback controls from the baseline specification of the life cycle model.

Panel A: Choice of portfolio management method, by age (%)
Age	20–35	36–50	51–65	66–80	80+	Total
Inertia	73.44	53.1	51.98	48.87	63.25	58.45
Active mgmt	7.93	19.54	19.1	25.67	0.16	13.58
Delegation	18.63	27.35	28.92	25.46	36.59	27.97
Panel B: Portfolio management transitions, by age (%)
Age	20–35	36–50	51–65	66–80	80+	Total
Inertia to:
Inertia	94.45	84.21	85.24	93.80	87.45	89.12
Active mgmt	1.46	7.09	6.21	2.90	0.04	2.99
Delegation	4.09	8.70	8.56	3.30	12.51	7.88
Active management to:
Inertia	8.66	14.85	12.97	4.57	5.83	9.43
Active mgmt	27.93	34.86	34.22	48.11	0.44	30.51
Delegation	63.41	50.29	52.80	47.32	93.73	60.06
Panel C: Equity fraction out of savings, by age (%)
Age	20–35	36–50	51–65	66–80	80+	Total
Inertia	34.9	64.3	61.3	50.8	46.8	50.0
Active mgmt	92.3	85.2	73.6	56.1	26.5	72.4
Delegation	74.4	74.3	67.9	49.2	38.6	57.1
Total	46.8	71.1	65.5	51.8	43.8	55.0