In this article 4th in the series of leaders “OpinionaTech” from LENSEL The team has put forward a new hypothesis that can be challenging for many investors and investment managers.
The article shows that regular optimization of asset allocation in the investment portfolio yields higher returns in the long run compared to the “regular balancing of initial weights” approach. More interestingly, in some cases (such as the test) the regular balance to the original weights can be overtaken by the “buy and hold” approach.
This suggests that overall investment strategies do not work – to get the best return, investment managers need to consider individual portfolio compositions and how they can be optimized for the benefit of investors.
Further research is ongoing, but you can read the article and check the preliminary results.
Check out previous articles in this series:
Episode 2 – What drives investors, mind or emotions?