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Step 11: Risk Exposure

Step 11: Risk Exposure

“We can extrapolate from the study that for the longterm individual investor, who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100% of performance.” – Roger Ibbotson, Ph.D., Ibbotson Associates, “The True Impact of Asset Allocation on Returns,” 2000

“Diversification is your buddy.” – Merton Miller, Ph.D., Nobel Laureate in Economics, 1990,, May 30, 2012

“A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies.” – Harry Markowitz, Ph.D., Nobel Laureate in Economics, 1990, Professor of Economics UCSD, “Portfolio Selection: Efficient Diversification of Investments,” 1959

“Investment planning is about structuring exposure to risk factors.” – Gene Fama, Jr., “The Error Term,” 2001

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