Asset Allocation Strategies


A number of theories about the hest method of allocating
assets have been developed over the years, Managers are
concernd about allocating scarce resources, mainly capital, in
most productive way. Managers want to ensure that the return
from the invested resources exceeds the cost of resources
Finanical theories and finanicial strategies try to facilitate
creating optimum value for investors in the companty, hut have
some conflicts with each other. Finanical theories suggest that
there is no need for stragtegic models becaucse efficient markets
allocate resources properly. As a result, investors do not benefit
from the actions of managers. On the other hand, managers can
point to the success of some cornpaines that have used strategic
allocation models that resulted higher value for securities.
In this paper, strategic asset allocation models was reviwed,
and then some conflicts between financial theory and financial
strategy was discussed.