We have all heard that choosing the asset allocation for your insurer will basically define your investment results. In other words, strategic asset allocation explains about 90% of the variance in performance. Tactical asset allocation can add value, but is difficult to achieve in the long run for a host of reasons. These include transaction.
Remember the good old days…of last year? Remember, when the financial press warned about the US economy going over the ‘fiscal cliff’, because our so-called ‘leaders’ in D.C could not stop a fiscal contraction that would hurt a still limping economy? Although the academically inclined chair of the Federal Reserve, Mr. Bernanke, mentioned the phrase,.
“I didn’t have to have long debates with President Bush about how bad the harm to the economy would be if the financial system went down. He had a good feel and he understood markets.” That’s former U.S. Treasury Secretary Henry Paulson explaining his relationship with former President George W. Bush during the financial crises,.
Here we are, five long, winding years after the demise of the venerable Lehman Brothers investment banking firm (recaps and outlooks by Bloomberg and Institutional Investor). What have we learned from that event, the beginning of the Great Recession, the most recent financial crisis? And, just as importantly, like a good mystery novel, whodunit: Who.