asset-allocation
Asset Allocation guides you through strategic and tactical frameworks for distributing capital across investments. It covers mean-variance optimization, Black-Litterman blending, risk parity, and age-based glide paths—plus liability-driven strategies for investors with defined obligations. Use it to build policy portfolios, evaluate 60/40 allocations, or structure core-satellite approaches.
Asset Allocation helps you determine optimal portfolio weights across asset classes using strategic frameworks and quantitative models.
AI-generated summary based on this skill's SKILL.md
Decision gist · record as of 2026-07-18
Asset Allocation helps you determine optimal portfolio weights across asset classes using strategic frameworks and quantitative models. Asset Allocation guides you through strategic and tactical frameworks for distributing capital across investments. It covers mean-variance optimization, Black-Litterman blending, risk parity, and age-based glide paths—plus liability-driven strategies for investors with defined obligations. Use it to build policy portfolios, evaluate 60/40 allocations, or structure core-satellite approaches.
Use it when
- Asset Allocation distinguishes these two frameworks: Strategic allocation sets your long-term policy portfolio weights based on goals.
- Asset Allocation explains mean-variance optimization.
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Frequently asked questions
AI-generated answers based on this skill's SKILL.md and metadata
How do I allocate my portfolio between stocks and bonds?
Asset Allocation helps you determine optimal portfolio weights across asset classes using frameworks like mean-variance optimization or Black-Litterman modeling. Your stock-to-bond split depends on your risk tolerance, time horizon, and financial goals. Common starting points include 60/40 (60% stocks, 40% bonds) for moderate investors or age-based rules like "110 minus your age" for equities. Asset Allocation guides you through strategic allocation (long-term policy weights) versus tactical adjustments for market conditions.
What is the difference between strategic vs tactical asset allocation?
Asset Allocation distinguishes these two frameworks: Strategic allocation sets your long-term policy portfolio weights based on goals and risk tolerance—this is your baseline. Tactical allocation makes shorter-term deviations from that policy to capitalize on market opportunities or hedge risks. Asset Allocation helps you understand when each approach applies and how to blend them into a coherent portfolio strategy.
How does mean-variance optimization work for my investments?
Asset Allocation explains mean-variance optimization, which calculates portfolio weights that maximize expected return for a given risk level (or minimize risk for a target return). It uses historical returns, volatility, and correlations between assets to find the efficient frontier. Asset Allocation also covers the Black-Litterman model, which blends market-implied weights with your own views to produce more stable, implementable allocations than raw mean-variance results.
What is a target-date fund glide path and how do I design one?
Asset Allocation guides you through age-based or target-date glide paths—systematic plans that shift your allocation from growth-oriented (high equity) when young to conservative (high bonds) as you approach retirement. A typical glide path gradually reduces equity exposure over decades. Asset Allocation helps you construct these paths, set rebalancing rules, and adapt them to your specific retirement date and risk profile.
How do risk parity and core-satellite approaches differ?
Asset Allocation covers both strategies: Risk parity weights positions so each asset class contributes equally to portfolio risk, rather than equal dollar amounts—useful for diversification across stocks, bonds, and alternatives. Core-satellite combines a stable core portfolio (often low-cost index funds) with tactical satellite positions for active bets. Asset Allocation helps you evaluate which approach fits your goals and implementation capacity.
What is liability-driven investing and when should I use it?
Asset Allocation explains liability-driven investing (LDI) for investors with defined obligations—pensions, endowments, or personal liabilities. LDI matches portfolio assets to the timing and magnitude of future cash needs, often using bonds or derivatives to hedge liability risk. Asset Allocation guides asset-liability matching frameworks so your portfolio structure aligns with what you owe, reducing shortfall risk.
SKILL.md
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Asset Allocation
Core Concepts
Strategic Asset Allocation (SAA)
The long-term policy portfolio based on an investor's risk tolerance, return objectives, time horizon, and constraints. SAA determines the baseline target weights (e.g., 60% equity / 30% bonds / 10% alternatives) and is the dominant driver of long-term portfolio returns. SAA should be revisited when investor circumstances change, not in response to market movements.
Tactical Asset Allocation (TAA)
Short-to-medium-term deviations from the SAA based on market views, valuations, or momentum signals. TAA requires a disciplined process to avoid becoming ad hoc market timing. Key
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