The typical money manager uses a “risk based” approach to decide what portfolio allocation they will recommend for a client investor. Risk Based Approach: The money manager gives the client a “risk questionnaire” to fill out. The goal of this questionnaire is to assess the client’s “risk tolerance.” By inputting the risk tolerance and age…
Category: Money Managers
What methods and strategies does your money manager use for your portfolio? This is a question that most investors cannot answer. Most managers out there are using what I call a “static model based approach” which has been developed using principles of Modern Portfolio Theory (MPT) and Asset Allocation. Modern Portfolio Theory – MPT: tries…