There is strong evidence that the total return on a portfolio is influenced more by its asset allocation plan than by specific security selections.

Question

Quizplus · Accepted Answer

Studies have consistently shown that around 90% of the variability in portfolio returns is attributed to asset allocation decisions, while only 10% is attributed to security selection. Therefore, asset allocation is considered to have a greater impact on overall portfolio returns.

There Is Strong Evidence That the Total Return on a Portfolio