Why Asset Allocation?
More than timing or
the specific securities you invest in, studies have shown that the way
in which your assets are allocated in stocks, bonds, and cash and how
they are rebalanced drive your returns.
Most
investors focus on individual security selection and often overlook the
importance of asset allocation to their portfolios. Yet, according to
several academic studies, 90% of portfolio variance is determined by
how your assets are allocated, so it is one of the most important
decisions any investor can make. It also underscores the importance of
relying on a disciplined investment process with asset allocation
strategy at its core.
By implementing a
systematic, global allocation of investment dollars, participants can
help themselves reduce the risk within their overall portfolio while
maximizing the returns they can expect to receive.
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ASSET ALLOCATION
Asset allocation cannot ensure a profit or protect against a loss
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This is for illustration purposes only and not indicative of any investment.
An investment cannot be made directly in an index.
Past performance is no guarantee of future results
Source: Brinson, Hood & Beebower, Financial Analysts Journal, 1986
Brimson, Singer & Beebower, Financial Analysts Journal, 1991
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