I saw an article in the CAIA newsletter this month regarding Asset Allocation and Illiquidity Risk by Hossein Khazemi, Program Director. Compared to previous posts, this is a slightly advanced idea. Khazemi writes:
"Liquidity represents the ability of an entity to fund future investment opportunities and to meet obligations as they come due, without incurring unacceptable losses. If there are mismatches between the maturity of an entity's assets and liabilities, the entity is exposed to illiquidity risk." He writes later about the Yale model of asset allocation created by David Swensen. Swensen has written Unconventional Success: A Fundamental Approach to Personal Investment and Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment.
The article can be accessed here.
Happy New Year to everyone! Best wishes for a great 2011.
No comments:
Post a Comment