Why asset allocation calls are being reduced to one simple question

Asset allocation is a complex interplay between strategic and tactical investment decisions. Although focused on different time frames, both types of decision involve favouring certain asset classes over others with the aim of managing risk and maximising potential returns. The more options created by these two allocation processes, the greater the opportunity for outperformance. Unfortunately, however, the pronounced risk-on/risk-off behaviour now characterising markets is a direct challenge to this. It dramatically reduces multiple asset allocation decisions to a simple choice betwe...