Asset Allocation

Welcome to our section on asset allocation, where you can find information and knowledge on asset allocation and portfolio construction.

We put up for you information regarding the classic portfolio construction and asset allocation techniques, why it makes sense to do them and how you can manage your money actively without the help of oftentimes costly managers. You'll see - it's a lot easier than you would have thought and the results will be the same - if not better - than they would with the help of external partners.

Get started right away by checking out our featured sections:

Free asset allocation portfolios (including 2017 allocation!)

Introduction to Asset Allocation & Portfolio Construction

The History of Asset Allocation


The Steps of Asset Allocation and Management

Before you get into constructing your portfolio and managing it over time (it's a lot less work than you would guess!), it is absolutely essential that you answer these questions for yourself. Of course, if we can assist with any questions you might have, do not hesitate to contact us.

1. Establish your set of financial goals

What purpose shall your investment outcome serve? Classic goals include withdrawing it as a lump-sum down the road or living off the generated annual interest from a certain point onward.

2. Make sure you understand the concept of “risk” and what it means to you personally

"Risk" is not equal to "risk". There are many types, which include the risk of your portfolio falling in value, the risk of owning a company which defaults or the risk that inflation rises faster than your asset value and dividends. Due to the diversification we recommend, the risk of a company default affecting you is low to nonexistent, while volatility or inflation risk is something that is material, but can be avoided via sound asset allocation.

3. Know the time period over which you are investing. That is extremely important when we construct a portfolio

4. Acquire the appropriate assets that will create a high probability of matching our risks, time horizons and financial goals

We recommend using passive ETF's that are cheap and easy to buy.

5. Maintain this portfolio in order to ensure that your portfolios are consistent with achieving your financial goals

Usually, no more than once every quarter you would have to take action.

More coming soon!

Such as:

Strategic Asset Allocation:

We will feature here information and models on asset allocation strategies and optimizations, including Mean-Variance optimization models, Minimum Expected Tail Loss (Historical, Gaussian and Modified) and Minimum VaR portfolio optimizations and Minimum Conditional Drawdown-at-Risk optimizations.

We will also feature knowledge and techniques on:

  • Risk Parity Portfolios
  • Correlation Parity Portfolios
  • Inverse Volatility Portfolios

Tactical Asset Allocation:

Here, we will introduce several momentum-based portfolios subject to diversification constraints.