Tactical asset allocation has a higher maintenance cost than a fixed allocation and this puts the strategy at a disadvantage from the start.
Specifically, top officials at Siwei were discovered to have been engaged in improper cost allocation that resulted in overstated profits.
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An adviser must make a reasonable allocation of the cost of the product according to its uses, the SEC has said.
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To the accountant, depreciation is the allocation of the cost of an asset over the expected useful life of the asset.
Then fill in the allocation with low cost funds since low cost has been one of the best indicators of superior future performance.
The rule also established reforms for cost allocation, most notably that costs allocated to a transmission facility must be roughly commensurate with estimated benefits.
Frank also cites an American Bar Association ethics ruling suggesting law firms should only bill clients their actual cost plus a reasonable allocation of overhead, including the cost of outsourced legal work.
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Most of the advice offered by full-service firms can be boiled down to simple asset allocation and diversification using low-cost indexed mutual funds, Schwab says.
Generally speaking, beating your mortgage cost will require a larger allocation to equities, which can entail substantial amounts of portfolio volatility.
The talk includes long-term planning, creating an appropriate asset allocation, and the selection of low-cost index funds and ETFs.
Indeed, some would argue that the spur of such a tax leads to more efficient allocation of the resources and thus to a negative deadweight cost.
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These low-cost funds, coupled with a fixed strategic asset allocation based on needs, create a high probability solution for nearly every investor.
What matters in successful portfolio management is deciding upon a sensible allocation based on your needs, filling those allocations with low-cost investments such as index funds and ETFs, and then staying the course through all market conditions.
There is a second cost that must be mentioned that is specific to tactical asset allocation.
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