Key takeaways from Morningstar’s 5 Lessons From 5 Decades of Asset Allocation:
- Our asset allocation approach has drawn on our research over the past 44 years, research spanning five decades for which we’ve won 11 Graham and Dodd Awards.
- In the early days, Ibbotson Associates pioneered strategic asset allocation based on rigorous research.
- Our asset allocation approach evolved when research pointed to the fact that expected returns vary over time in ways that are predictable, creating opportunities for investors to enhance returns. Today we call this valuation-driven asset allocation.
- Our history has taught us five lessons: 1) to be long-term minded, 2) to use a simple framework for assessing value, 3) to deeply assess fundamentals, 4) to think contrarian, and 5) to understand where you are in the capital cycle.
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