Asset allocation

Mar 14, 2026
finance

Asset Allocation in Continuous Time: Optimal Investing

In the one-period portfolio models like Markowitz and CAPM, you make your investment decision once and then sit and wait. You cannot change your mind. But in real life, you check your portfolio, see how the market moved, and rebalance. You do this every day, every hour, maybe every minute. Chapter 66 of Wilmott’s book, based mostly on Merton’s work, develops the theory of continuous-time investment and portfolio rebalancing. The results are surprisingly elegant and give genuine practical insight.

Jun 03, 2019
fixed-income

Why Bonds Belong in Your Portfolio: Strategic Asset Allocation Explained

Chapter 2 asks a question every investor should care about. Why put money in bonds at all? Stocks get more attention, they’re flashier, and over long periods they tend to return more. So what’s the case for fixed income?

Apr 26, 2019
personal-finance

Behavioral Finance Case Studies: Two Investors, Two Very Different Problems

Chapter 25 is where all the theory from the entire book gets applied to actual people. Well, fictional people. But they feel real enough that you will probably recognize yourself or someone you know in one of them.

Apr 25, 2019
personal-finance

Behavioral Finance and Asset Allocation: Why the 'Perfect' Portfolio Doesn't Exist

After 20 chapters of learning about individual biases, Pompian finally gets to the big question: so what do you actually DO with all this knowledge?

Mar 15, 2019
book-retelling

Investing at Every Age: A Life-Cycle Guide

A thirty-four-year-old and a sixty-four-year-old should not invest the same way. This seems obvious when you say it out loud. But a surprising number of people treat investing like it’s one-size-fits-all.

Jan 31, 2019
finance

Investment Advice for Every Investor Type - Behavioral Finance Chapter 15

This is it. Chapter 15 of Behavioral Finance and Investor Types by Michael M. Pompian is where everything comes together. All those chapters about biases, personality types, asset classes, and financial planning? They were building up to this. The final chapter answers the obvious question: okay, I know my investor type, now what do I actually do with my portfolio?

Jan 29, 2019
finance

What Is Asset Allocation and Why It Matters Most - Behavioral Finance Chapter 13

Chapter 13 of Behavioral Finance and Investor Types by Michael M. Pompian is about the single most important investment decision you will ever make. Not which stocks to buy. Not when to buy them. It is about how you split your money across different types of investments. That is asset allocation.

Jan 25, 2019
finance

Dynamic Asset Allocation - A Behavioral Approach

So you picked your ideal portfolio. Good stocks, some bonds, maybe real estate. Everything is balanced perfectly. Now what? Do you just sit there and never touch it again?

Jan 23, 2019
finance

Prospect Theory - How We Really Make Decisions

This is a retelling of Chapter 6, Part 2 (sections 6.7-6.9) from “Behavioral Finance for Private Banking” by Thorsten Hens, Enrico G. De Giorgi, and Kremena K. Bachmann (Wiley, 2018).

Jan 03, 2019
Fixed Income Investing

Strategic Asset Allocation: Why Bonds Belong in Your Portfolio

Book: Systematic Fixed Income: An Investor’s Guide Author: Scott A. Richardson, Ph.D. Publisher: John Wiley & Sons, 2022 ISBN: 9781119900139

Asset allocation