Outcomes drive investment strategy

The investment and asset allocation decisions and choices that we make are a function of our desired outcome, and the constraints that are placed. In a stylized world we can try to build out an elegant theory and assume we never need to worry about outcomes, but the reality is that any dollar invested, by definition, is a dollar that is being kept for a specific use in the future – whether the future is a day, year, ten years or a hundred years away impacts how you invest it. From an asset management perspective, asset managers need to recognize this and adopt a more objective driven approach to align their strategies with their client’s objectives – this is what McKinsey refers to in their white paper as “Outcomes are the new alpha”.

Disclaimer: All views expressed in this article are that of the author and do not necessarily reflect the views of his employer or any of its affiliates. The author may be associated as an investor or as an advisor with certain companies mentioned in this article.