Quotes About Asset-allocation

Fidelity to asset-allocation targets requires regular purchase of the out-of-favor and sale of the in-favor, demanding that investors exhibit out-of-the-mainstream, contrarian behavior.

Three basic investment principles inform asset-allocation decisions in well-constructed portfolios. First, long-term investors build portfolios with a pronounced equity bias. Second, careful investors fashion portfolios with substantial diversification. Third, sensible investors create portfolios with concern for tax considerations. The principles of equity orientation, diversification, and tax sensitivity find support both in common sense and academic theory.

Investors generally fail to follow the most basic investment precepts. Instead of concentrating on the central issue of creating sensible long-term asset-allocation targets, investors too frequently focus on the unproductive diversions of security selection and market timing. Instead of constructing equity-oriented, well diversified, tax-sensitive portfolios, investors too frequently choose to mimic the conventional, poorly structured consensus