At Active Asset Allocation, as our name suggests, we focus on dynamic asset allocation strategies. We strive to provide solutions to investors and advisors seeking to build 100% individualized, strategic, portfolios for themselves or their clients.

In this article we explore the sculpting of strategic portfolios for retail investors that have a specific investment goal. We believe that the strategic solutions of fered in the market leave a lot of room for improvement insofar as they seek to optimize only one portfoliometric, regardless of the investor’s chance to reach his goal.

There are many reasons for an individual investor to opt for a strategic rather than a dynamic asset allocation strategy. Examples can be transaction costs, absence of dynamic solutions, or even the lack of interest in financial markets generally. In a strategic framework, an investor identifies a target allocation and then periodically rebalances the portfolio back to the target weights.

Rebalancing is necessary as the allocation deviates from the initial target due to varying returns among the assets. Significant changes in portfolio composition are thus occasional, if not unlikely. Whether it is a self-managed life insurance plan or an employees’ saving plan, the investor selects a set of investment vehicles and assigns target weights to them. While finding the right blend of asset composition may seem like a simple and straightforward exercise, in reality it can be quite challenging and stressful. This can be attributed partly to the investors’ wealth being at stake, and partly to the absence of decision-support tools that help investors choose an appropriate asset mix for their personal goals.

With a holistic analysis of each investor’s goal, the approach taken by AAA makes sure that the investor’s goals and needs are center stage throughout the entire portfolio design process, ensuring that he is offered a solution that gives him the best chance to meet his goal.


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