On Asset Allocation in a Volatile World, and the Power of Turmeric!


Market Gup Shup

From: aditya rana
Date: Sat, Jun 15, 2013 at 2:24 PM
Subject: On Asset Allocation in a Volatile World, and the Power of Turmeric!

Hi!,

It is extremely helpful, from time to time, to step back from the daily business of managing capital and look at the bigger picture in terms of broad asset allocation and expected portfolio returns over the medium term (3 to 5 years). There are few people who do this better than Saumil Parikh, a member of PIMCO’s Investment Committee, and his recent note titled "A Secular View of Assets: Surfing the Wedge" http://www.pimco.com.hk/EN/Insights/Pages/Secular-View-of-Assets-2013.aspx provides a useful framework to help construct a suitable portfolio asset allocation (this note follows his excellent note "Forecasting Equity Returns in the New Normal" from November, 2012 which helps dispel widespread misunderstandings regarding the constituents of equity returns). To summarise:

-To elaborate on Warren Buffet’s famous 2008 statement "price is what…

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