Roger G. Ibbotson: What Works in Asset Allocation

Blaaaaa

What?

There are few insights in this piece. Economic models for countries and the world surely would go some way to assist asset allocation decisions based on cycles, structural problems, political savvy and luck. Geopolitics and their interaction with local politics, however, may and do render economic models useless.

Therefore, the evaluation of asset allocation performance itself is probably a useless activity. But I am in favour of active tilts nevertheless. Documenting the rationales for tilts is the problem not identification of factors.

It was clear early on that Trump was going to succeed in slowing the pace of global activity while foot to the floor pushing the US recklessly forward. That would have you overweight US stocks and USD. So far so good. But developments in the oil market were also crucial in the low inflation story.

My proposal then is to use active and try to be clear as you record your policy moves why you made them and learn from those yourself. But convincing others in a scientific way won't happen while politics is more important than it should be