Asset Allocation Is a Form of Risk Allocation

Author Larry Berman

Re-Posted: 14 May 2012 re-posted from etfcm

Ashvin Chhabra, chief investment officer at the Institute for Advanced Study, is well-known for his seminal 2005 article “Beyond Markowitz: A Comprehensive Wealth Allocation Framework for Individual Investors,” in which he reframed asset allocation through the lens of risk allocation while building on the central tenets of Modern Portfolio Theory and behavioral finance.

Speaking on Monday at the 65th CFA Institute Annual Conference in Chicago, Chhabra reminded the audience that “asset allocation is a form of risk allocation.” He proposed a goals-based risk allocation framework for unstable markets as “a different way” to construct portfolios and understand markets.”



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