The passive form of investing is about reaching your goal by selecting the right asset allocation for your needs, participating in the markets cheaply through index funds and ETFs, and rebalancing the portfolio on occasion to return to its target allocation.

FORBES: Passive Investing Beats the Markets

For any portfolio that includes an allocation to gold, there is a better portfolio, one with a higher expected return or a lower volatility that has a zero allocation to gold.

FORBES: The Optimum Asset Allocation to Gold Is Always Zero

Markowitz used mathematics to explain the relationship of risk to return as it relates to asset allocation.

FORBES: Is Modern Portfolio Theory Out-of-Date?

For example, a conservative investor should have fairly low return expectations given the defensive asset allocation that an advisor would recommend.

FORBES: Three Things Most Investment Advisors Don't Tell You

Second, this rate of return is then matched to the expected returns of the asset classes to find the allocation in stocks, bonds, and cash that best fits the return requirement.

FORBES: Earn More with Index Funds in 2013 and Beyond

Asset class rebalancing is used to return a portfolio back to its fixed target allocation.

FORBES: Choices in Portfolio Rebalancing

The characteristics of an equity portfolio can be customized to complement an overall asset allocation strategy in meeting long-term return and risk objectives.

FORBES: Equal-Weight Indexers Didn't Suck Wind For A Decade

Bill Gross and Mohamed El-Erian have turned bullish on muni bonds ahead of inevitable tax hikes in 2013, and have put their money where their mouth is by beefing up the allocation to these securities in the Total Return Fund.

FORBES: Municipal Bond ETFs Look Good

Jupiter is looking at absolute-return funds with performance fees, in which it would take some control of asset allocation.

ECONOMIST: For the fortunate few

The return of the models are ranked against each other and compared to the results of a static allocation.

FORBES: The More Things Change, the More...