Parting Thoughts

October 2006
Journal of Financial Planning;Oct2006, Vol. 19 Issue 10, p40
Academic Journal
The article presents the author's thoughts on false assumptions related to asset allocation, the determinants of portfolio performance, and the determinants of financial success. The dangers of financial planners being lured into thinking that asset allocation policy plays an important role are: the risk of active asset allocation in achieving long-term financial goals, and the risk of large opportunity cost. He discusses how financial planners have fallen into the trap of relying on historical returns and buying into false assumptions of the random walk model.


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