Once you understand the characteristics of specific asset classes, the next step is to combine assets into a portfolio using ETFs and funds.
In order to do so, we need a framework or methodology for how asset should be combined. This process is called asset allocation and the following explains why the forward looking, valuation based asset allocation framework used on the Hub is preferred over other methodologies.
What Should You Do Next?
After you watch the video, you are ready to explore how reasonable expected return and risk assumptions are created for stocks, bonds and other asset categories.
Go To Step 4: Develop Return and Risk Assumptions By Asset Class
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