A key part of the typical financial planning process is determining the proper mix of stocks and bonds to come to the optimal risk-reward tradeoff for a client based on their unique ability to take on and tolerate risk. We have long taken issue with the conventional wisdom surrounding asset allocation, questioning the time horizon used to evaluate risk and whether today’s advice is leading to overly conservative long-term outcomes.
Download our latest research piece with this link that explores the effectiveness of diversification and the dynamic nature of correlation between commonly used asset classes using the 2008 Financial Crisis as case study. An excerpt is below: