Specialist asset allocation research house, farrelly’s, has released a paper “Between the Ivory Tower and the Philistines: Practical Asset Allocation” which outlines the academic approach to asset allocation, and the approach taken by most practicing planners, and suggests a middle ground combining the best of both.

Farrelly’s paper covers the main steps in the asset allocation process, and discusses how those with a purely academic mindset approach the task, how most practicing planners go about it, and a middle ground which combines the best of both approaches while avoiding the manifest problems inherent in each. The paper concludes with a list of si...