Asset Allocation
Course Objectives
Introduction
Confusing Market Performance with Investor or Manager Performance
Asset Allocation Studies
If It’s So Easy, Why Doesn’t Everyone Do It?
Determinants Of Portfolio Performance
Portfolio Performance and the Investment Planning Process
Three Main Determinants Of Portfolio Return
Benefits Of Asset Allocation To Investors And Financial Professionals
Disciplined Investing
Long-Term Orientation
Creating An Asset Allocation Plan
Four Main Factors
Financial Objectives
Financial Situation
Additional Factors
Taxes
Diversification And Modern Portfolio Theory
Traditional Diversification
Selection of individual securities
Varying degrees of credit quality
Selecting different money managers
International investments
Modern Portfolio Theory
Diversification Effect
Asset Classes
Portfolio Objectives
Income-Oriented Portfolio
Conservative Growth Portfolio
Balanced Portfolio
Growth-Oriented Portfolio
Asset Allocation Plan Implementation
Product Selection
Market Timing
Monitoring and Rebalancing
Market Timing Effects
Asset Allocation Differences
Rebalancing Methods
Computer Optimization
The Efficient Frontier
Case Study
Expected Return
Standard Deviation
Allocating Assets Rather Than Simply Diversifying
Examples of the Efficient Frontier
Sharpe Ratio
Opinions On Asset Allocation Models
Criticism And Problems
Standard Deviation as a Measure of Risk
Pitfalls With Portfolio Optimization
The Case For Asset Allocation
Asset Allocation In Review
Money Management: Simple, But Not Easy
Asset Allocation Glossary
Asset Allocation Quiz
Return to Course List