Sublime Consulting

Asset Allocation owes its origins to the Nobel Award Winning Professor Harry Markowitz’s Modern Portfolio Theory or ‘ Mean Variance Analysis’.
Data Collected by his team over long periods of time on markets and specifically on equities, bonds and cash indicated that the proportion of these 3 major categories played a vital role in the portfolio performance. In fact, the asset allocation contributed 91.5% towards the portfolio’s performance vis a vis ‘market timing’ that contributed just 1.8%.

Also ’security selection’ contributed 4.6% to the portfolio performance. Few other factors like ‘re-balancing’etc contributed 2.1% towards the portfolio performance.
As you can see..clearly the winner is ‘asset allocation’.
Well… so much for market timing and security selection!!

Asset Allocation is the way to go!
Amen to market timing!