harold’s blog…a work in progress

The best academic research we know of indicates that 97 percent of the long-term return of any portfolio is determined by its asset allocation, the selection of what types of assets make it up. Only about 3 percent is determined by the choice of specific investments.
Ironically, investors typically focus 97 percent of their attention on trying to identify the best stock, the best fund, the best guru or the best newsletter – a quest that determines about 3 percent of their performance – while they spend almost no time on asset allocation – which makes 97 percent of the difference.