Asset Allocation: Who are you Investing For?Asset Allocation: Who are you Investing For?

It’s been widely publicized that a principal determining factor in the volatility and return of an investment portfolio is the portfolio’s asset allocation. Financial advisors often cite the results from a study published in 1986, “Determinants of Policy Performance,” by Brinson, Hood and Beebower, which concluded that 93.6 percent of the variation of returns is explained by a portfolio’s asset allocation policy. While the findings of this study have been debated, specifically the actual degree to which asset allocation drives an investment portfolio’s outcome, there’s agreement that, regardless of the actual percentage, asset allocation plays an essential role in determining an investment portfolio’s return.

The Financial Industry Regu...