Chapter 6
Investment Strategy
The plan
‘If you don’t know where you are going, you’ll end up somewhere else’
Yogi Berra
Once you have formulated your investment objectives and constraints the next step in the investment management process is setting an investment strategy that has the highest likelihood of meeting your objectives whilst complying with the constraints.
Investment strategy (investment policy) is the plan of how you will position and manage your portfolio, aiming to achieve your desired outcomes given your risk tolerance. It is made up of a top-down asset allocation, deciding how much to invest in each asset class, and a bottom-up investment selection, deciding which investments to use under each asset class.
The future is unknown. ...
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