Asset Allocation

Asset allocation is the exercise of determining how much of each asset class you should hold in your portfolio. In general, the asset classes that we have to choose from are stocks, bonds, real estate investment trusts, and alternatives. Those categories can be broken down further, but I will leave it there for now. Except in hindsight, there is no optimal asset allocation. The best that we can do is take guidance from the academic literature.

I’m Ben Felix, Associate Portfolio Manager at PWL Capital.

Referenced in this video:

Foreign Withholding Tax - https://www.pwlcapital.com/foreign-withholding-tax/

Do You Need Alternative Investments? Part I: High Yield Bonds - https://www.pwlcapital.com/do-you-need-alternative-investments-part-i-high-yield-bonds/

Why I prefer to avoid preferred shares (Alternative Investments, Part 2) - https://www.pwlcapital.com/why-i-prefer-to-avoid-preferred-shares-alternative-investments-part-2/

The Illusionary Allure of Hedge Funds (Alternative Investments, Part 3) - https://www.pwlcapital.com/the-illusionary-allure-of-hedge-funds-alternative-investments/

The Cross Section of Expected Stock Returns - https://www.jstor.org/stable/2329112?seq=1#page_scan_tab_contents

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PWL Capital Blog Post: https://www.pwlcapital.com/portfolio-asset-allocation-good-better-and-best-practices/

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