Asset Allocation: Forget about the noise—focus on your goals. To reach your objective, you need to save for the next ten years, aiming for your assets to grow at, say, 10% compounded annually.
What combination of asset classes can help you achieve this 10% return with the lowest possible risk?
Optimized portfolios, for instance, are examples of probabilistic thinking.
I once read that people judge because they find it difficult to think deeply. If you rely on past performers or believe that "equity always works," you're taking shortcuts—you're making judgments.
But true thinking means setting aside past performance and tax concerns, focusing instead on the return you need over the specified time frame.
What’s the least risky portfolio you can create to achieve that return? That’s how people should approach their investment decisions.