How to Build an Implied Return Model

I'm classically trained in that MVO mean variance optimization space. I have kind of come from 180 after doing that for a number of years and realized that's almost a silly exercise instead of mean variance optimizations it's really error maximization. So we use something different. It could be running an Excel spreadsheet that spits out the return that you have to believe for your weights to be optimal. And then the last piece you've got to layer on top of that is liquidity. There's no liquidity construct in just a sterile MVO process, which we've got to think very, very carefully about even if we're only spending five percent a year.

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