Investor Corner/Building and judging a portfolio

3.1 Portfolio Construction & Behaviour

How to combine assets into a portfolio that matches your own goals and risk tolerance, and the behavioural mistakes, panic-selling, chasing performance, that undo otherwise sound plans. Two portfolios holding identical funds can produce very different outcomes depending on how they are combined and, just as importantly, how the investor behaves when markets fall. This section covers both halves: the mechanics of asset allocation and rebalancing, and the behavioural mistakes that undo an otherwise sound plan.