In order to minimise the risks to future financial security not being met, conservative risk and return assumptions should be used for modelling the future return on stock market investments. These projected returns should reflect the current risks in the economy and market place, as opposed to the historical risks and returns on which most retail modelling is based. Additionally returns should also be hit with future economic and market risk. The benefit of this approach is that stress testing has already hit future return with stock market and economic risk enhancing long term income and capital security. Effectively when the S&P 500 hit its lows in 2002, your advisors should have been able to rerun their modelling analysis and come up with little or no change to the ability of your assets to meet your needs. Unfortunately, many software systems and financial institutions have tended to use projected returns which do not fully accommodate the risks to returns. As a result, many investors find that they have to scale down the income and capital they can take from their portfolio following market declines and economic downturns. Return assumptions for low risk investments should also be capable of protecting planned security against significant interest rate and inflation risk. Essentially, a portfolio should be able to cope with significant financial risks and still be able to provide the financial security planned at outset. This can only be achieved through sensible financial modelling and a portfolio structure which is directly related to meeting financial needs irrespective of risk.  | 
