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Reviewing asset allocation

Reviewing asset allocation - Microsoft Excel Tutorial

From the course: Excel for Investment Professionals

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Reviewing asset allocation

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- [Instructor] Analytics on a portfolio are important, but they won't help if the portfolio is not effectively constructed in the first place. Asset allocation really just involve deciding on the weights for cash, for bonds, and for stocks, but the reality is that different investors have different needs. Whatever type of investor you're dealing with, asset allocation is the most important decision that investor's going to make. By some studies, up to 90% of returns are driven by asset allocation. The differences in asset allocation are going to cause differences in your portfolio performance. So even though asset allocation is the step we take first, it's going to drive the majority of our returns. When people think about a great portfolio, they often envision picking the next Apple or Google, but that security selection is only going to drive a small portion, maybe as little as 10% of the overall returns the investor will see over time. When we're considering what type of investor…

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