The Impact of Asset Allocation
Here we see that the portfolio decisions with the maximum impact on
returns are those relating to strategic asset allocation (the choice of diverse
asset types). This has a 91.5% impact on portfolio returns. Attempting to time
the markets (tactical approach) or choosing individual securities
(stock-picking) have very little impact by comparison. Therefore, if the
portfolio construction is right, your investment is more likely to achieve the
returns that you want and need it to.