"there is no such thing as a free lunch", which is believed to be no stranger to most investors, and many economic researchers believe that "there is no such thing as a free lunch" as a creed.

However, Harry Markowitz, a Nobel laureate in economics, believes that "there is a free lunch in the world" and that asset diversification is a "free lunch" in investment.

David Swenson, a former chief investment officer at Yale University, wrote in his book "extraordinary success: the way to win personal Investment" that with diversification, investors can reduce risk while maintaining a stable level of yield. or can boost the rate of return while the risk remains the same, even in an adverse market environment, investors are still likely to stick to the established investment direction.

The book provides detailed ideas on diversified asset allocation, and today we will walk into this book together.

Decision-making of asset allocation

With regard to the decision of asset allocation, few investors really consider it as an important decision. Some investment experts say that some individual investors will spend a lot of time on timing trading and securities selection, while ignoring the most important multiple asset allocation decisions.

David Swenson points out that asset diversification is a long-term decision, and once we determine the allocation of funds across different asset classes, we rarely change it.

How to make asset allocation decisions, you can follow the following steps:

Step 1: determine the investment target

Step 2: understand the risk preference of self-investment

Step 3: understand the cycle of investment and use of funds

With regard to the first step, setting clear investment goals can help us better judge the risks and cycles corresponding to the current investment.

The second step is the self-awareness of risk preference, which is the key for individuals to build a portfolio. Sound investors may focus more on determining the target asset class, and at the same timeMore attention should be paid to the diversification of investment。

In the 1930s, the dollar that bought US small-cap stocks depreciated to 10 cents, and in the 1970s, the dollar depreciated again to 30 cents, but if we look at it today, the small-cap stocks bought by the dollar in June 1932 have risen more than 100000 times by December 2003, so although diversification can not guarantee our earnings, diversification can help us tide over some difficulties. For example, if only part of the portfolio plummets, investors may be able to get through a painful time and end up with sizeable gains.

As for the understanding of the capital investment cycle, David Swenson pointed outLong-term funds should focus on equity assets.. For example, a two-year-old's college savings plan should have a high-risk, high-return asset allocation, while a high school student's college plan can withstand a lot of fluctuations. At the same time, Swenson also cited a survey report by a Yale scholar, which showed that in the nearly 80 years from 1926 to 2003, the annualized return on stocks of large American companies was 10.4%, while that of long-term government bonds in the United States was 5.4%.

Practice of asset allocation

After making a decision on asset allocation, Swenson also gives clear suggestions for the practice of decision-making.

The first is the actual performance ratio of each asset, in order to ensure that each asset can play a roleThe minimum position of each asset can be controlled at 5%, 10%.In order to avoid the huge impact of a single asset, the allocation of each assetDon't be too focused.。

Secondly, we should consider the possible economic changes in advance.If we encounter emergencies such as a sudden shortening of the investment period, we can achieve the purpose of asset allocation corresponding to the use of new funds by changing the asset allocation ratio of high and low risk.

The ingenious use of "fixed income +"

After understanding the decision-making and implementation methods of multiple allocation, you may have a better understanding of the significance of asset allocation, says Swenson. Asset allocation is a relatively good tool in the investment methods of rational investors.

At present, the "fixed income +" products on the market help investors to allocate assets with one click in different market environments through portfolio investment in fixed income assets and equity assets.

When the stock market is volatile, its volatility is generally lower than that of partial stock funds; when the stock market is upward, it has the opportunity to strive for thicker returns compared with pure debt funds. To a certain extent, taking into account both income and volatility, it may be possible to achieve "advance and attack, retreat and defense".

Investors can choose their own "fixed income +" products according to the asset allocation strategy mentioned above.