I love finding fresh ways to revisit simple but vital concepts. A paper by Peng Chen of Ibbotson Associates and others, written in 2005, did just that. It expounded views on wealth and risk optimisation that stand in stark contrast to the dry use of standard finance in financial institutions’ portfolios.

Traditional asset allocation for individuals entailed fixing a target return, reining that back for risk tolerance, tossing in a liquidity buffer (just in case), settling on an investment horizon and interweaving it with the person’s tax rate...

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