Share these talks and lectures with your colleagues
Invite colleaguesWe noted you are experiencing viewing problems
-
Check with your IT department that JWPlatform, JWPlayer and Amazon AWS & CloudFront are not being blocked by your network. The relevant domains are *.jwplatform.com, *.jwpsrv.com, *.jwpcdn.com, jwpltx.com, jwpsrv.a.ssl.fastly.net, *.amazonaws.com and *.cloudfront.net. The relevant ports are 80 and 443.
-
Check the following talk links to see which ones work correctly:
Auto Mode
HTTP Progressive Download Send us your results from the above test links at access@hstalks.com and we will contact you with further advice on troubleshooting your viewing problems. -
No luck yet? More tips for troubleshooting viewing issues
-
Contact HST Support access@hstalks.com
-
Please review our troubleshooting guide for tips and advice on resolving your viewing problems.
-
For additional help, please don't hesitate to contact HST support access@hstalks.com
We hope you have enjoyed this limited-length demo
This is a limited length demo talk; you may
login or
review methods of
obtaining more access.
Printable Handouts
Navigable Slide Index
- Introduction
- Asset allocation
- Strategic asset allocation
- Risk and return in asset allocation
- Risk and return
- Portfolio construction
- Asset correlation
- Negative correlation isn't essential
- The efficient frontier (1)
- The efficient frontier (2)
- Improving the efficient frontier
- Efficient vs. inefficient portfolios
- Market risk
- Thank you!
This material is restricted to subscribers.
Topics Covered
- Basics of asset management
- Strategic asset allocation
- Risk and return
- Asset correlation
- The efficient frontier
Talk Citation
McDonald, M. (2020, September 30). Asset allocation and portfolio management on the CFA [Video file]. In The Business & Management Collection, Henry Stewart Talks. Retrieved November 2, 2024, from https://doi.org/10.69645/QFXE9866.Export Citation (RIS)
Publication History
Other Talks in the Series: Introduction to Financial Analysis
Transcript
Please wait while the transcript is being prepared...
0:00
Hello. I'm Dr. Michael McDonald.
I'm a professor of finance at Fairfield University.
Today, I'd like to talk to you about asset allocation and portfolio management,
in particular, as it relates to the areas you need to know on the CFA exam.
Let's get started, shall we?
0:20
Now, asset allocation simply means deciding on the weights
that you want to hold in a particular portfolio for cash,
bonds, stocks, and potentially any alternative investments.
This decision seems boring and mundane,
but the reality is that it is the single most important decision that any investor makes.
Up to 90 percent of returns over time,
according to independent studies that had been done,
are driven by the asset allocation decision.
Stock picking, bond picking seems very exciting,
but the reality is it's actually far less important than having
the right asset allocation and then sticking with that asset allocation over time.
In fact, differences in allocation cause
enormous differences in portfolio performance over the long run.
1:11
Now, strategic asset allocation is all about figuring out
the right asset allocation for an investor based on different factors.
The idea here is that if an investor can't stick with
their asset allocation in good times and in bad,
then the allocation is not the right one for that investor.
If the investor isn't able to stay with it and sleep well,
then they're probably taking on too much risk.
So when we consider setting up an asset allocation for an investor,
we have to consider factors like,
what are their return requirements?
What's their level of risk tolerance?
What's the time horizon for that investor?
What is the age of the investor if it's an individual investor?
What type of institution is it if it's an institutional investor, etc.
Once we figure out what the right asset allocation is for the investor,