The first article on strategic asset allocation (SAA) dealt with the risk model as the basis of a training plan. In this article, we also want to draw a parallel to sport. While athletes follow an individually tailored training philosophy, investors are also guided by a range of investment philosophies.
Our aim is to derive a substantiated market opinion from the large number of assessments from different perspectives. To this end, we take a panoramic view of our portfolio managers and gather their market expectations. In a further step, a multi-asset committee determines market uncertainties on the basis of scenarios. The results are then reviewed and accepted by the multi-asset experts.
Surveys as a tool against blind spots
According to Ray Dalio, one of the most successful hedge fund managers, there are two barriers that prevent good decisions: blind spots and the ego.
We make blind spots as visible as possible by conducting an internal survey of our more than 50 portfolio managers in the asset classes of equities, bonds, real estate and commodities. This way, we get a broad view of the prevailing market opinions.
In the survey, we ask about the medium-term drivers of the market, the potential risks with their probability of occurrence, the optimal investment positioning and the most attractive investment themes. We use word clouds and classifications to visualise the inputs. An example of a word cloud for the most important drivers for 2022 is shown in the following graphic (only in German). It is based on expert input on key points for 2022.