TY - JOUR T1 - Practical Applications of Factor Allocation and Asset Allocation JF - Practical Applications SP - 1 LP - 5 DO - 10.3905/pa.6.3.301 VL - 6 IS - 3 AU - Gregg S. Fisher AU - Michael B. McDonald Y1 - 2019/01/31 UR - https://pm-research.com/content/6/3/1.7.abstract N2 - In the debates about factor timing that have run through academic and industry literature during recent years, researchers have demonstrated that the returns to risk premia such as value and momentum vary through time, although they have disagreed over whether it is possible to profit from those shifts. In Factor Allocation and Asset Allocation, published in the Fall 2018 issue of The Journal of Wealth Management, academic Michael McDonald (Fairfield University) and investment manager Gregg Fisher (Gerstein Fisher) put a fresh spin on the subject by examining smart beta from the perspective of changing individual investor needs throughout life. The findings suggest that of younger investors, or those who can tolerate a riskier, growth-oriented approach, should tilt their portfolio allocations toward the size and value factors, whereas older investors, or those favoring less risk, should tilt toward the quality factor.TOPICS: Portfolio construction, analysis of individual factors/risk premia, risk management, performance measurement ER -