Since I am not a fan of most
conventional asset allocation, I am personally surprised by this result, but now let me explain why I reached this conclusion.
Wealthier people in America do not follow
the conventional asset allocation model of buying bonds, i.e. age equals your bond percentage allocation or a 60/40 equities / fixed income split.
In any event, our view is that the 10 - year nominal total return on such
conventional asset allocations is likely to be less than 2 % annually.
Not exact matches
This calls into question the reliability of industry
asset allocation and diversification strategies and the prediction capability of
conventional portfolio risk modelling techniques.
I know much has been said about the
conventional strategy of passive investing, which is to pick your
asset classes according to correlations, rebalance often, and stick to your
allocations, whatever the market does.
Jason explains what the
conventional wisdom is with retirement
asset allocation, and then goes on to explain why it makes sense for his own financial planning to deviate from that.
I've covered a lot of ground on
conventional investing practices such as diversification,
asset allocation, indexing and dollar cost averaging.
This has led to some investors exploring risk - factor - based
asset allocation as a potential new framework for portfolio construction, and looking at alternative beta strategies in an effort to rectify the «defects» of
conventional market portfolios.»
Unlike traditional
asset allocation — which generally shifts
assets between «
conventional» equities and bonds — Sizemore Capital incorporates non-traditional
asset classes including: