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Asset Allocation, whats that?

Discussion in 'Investing Strategies' started by Johny_come_lately, 8th Sep, 2010.

  1. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Within the January 2001 Financial Analysts Journal, R. Ibbotson from Yale and P. Kaplan an economist, published a breakthrough study entitled 'Does Asset Allocation Policy Explain 40, 90 or 100 Percent of Performance?'. The study debated whether it was asset allocation, or stock picking, that controlled performance. The study concluded that 90% of a portfolio's long term return was determined by asset allocation.

    So, why is there little mention of allocation on this forum, when it plays such an important position in investing?



    Johny.
     
  2. Tropo

    Tropo Well-Known Member

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  3. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
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    Posts:
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    Location:
    SE Queensland
    Thank Tropo,

    I read the intro's to both books. The second one had good material but was written so bad I kept falling asleep. I might buy it, as a reference.

    It mentioned means variance optimisation software. I have never heard of this. I wonder if this is available in Australia?

    Do investors on this forum create a strategic plan before they start buying? If not, why?



    Johny.
     
  4. Tropo

    Tropo Well-Known Member

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    Location:
    NSW