Asset allocation is the first step in any investment process. It is a vital element as it sets the stage for any portfolio's return and risk profile.
Academic studies have shown that more than 90% of variability in investment performance can be attributed to asset allocation. Decisions concerning asset mix have a greater impact on a portfolio's overall investment results that individual security selection or market timing.
Multi-asset, multi-market and multi-style can be combined to produce portfolios that can be constructed to be strategically actively managed within client-determined risk ranges.
In this blog I will explore a wide range of traditional (stocks, bond and cash instruments) and alternative (hedge funds, private equity, real estate, commodities, currencies, timberland, etc) asset classes, markets, styles and strategies.
I am open and flexible regarding the mix of components that can be used as it depends on client investment objectives, risk tolerances, income requirements and liquidity needs. I believe that getting market exposure through cheap and efficient building blocks such as ETFs, index funds and futures are valuable tools in the portfolio construction and risk management process, especially when combined with active alpha generators.
Keeping up with economic, market and political factors are important in trying to anticipate what could happen and by developing strategies that reflect those views. We certainly do have our opinions, views and strategies.
I hope you enjoy reading and interacting with this blog and welcome your feedback.
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