Insights Now Why is asset allocation so important?
Aug 21, 2025
David Lebovitz, a global strategist at J.P. Morgan Asset Management, shares his expertise on asset allocation amid shifting economic landscapes. He discusses the critical balance between strategic long-term planning and tactical short-term adjustments. The conversation dives into the U.S. high yield credit market, revealing how current valuations influence investment strategies. Lebovitz also emphasizes the significance of diversification tailored to specific goals, reflecting a shift from traditional portfolio models to more inclusive approaches.
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Strategic North Star With Tactical Overlay
- Use long-term capital market assumptions (LTCMAs) as a strategic North Star for asset allocation.
- Then overlay tactical moves to exploit market dislocations and volatility relative to those LTCMAs.
Valuation Drives Credit Positioning
- Credit can be attractive long term but valuation matters for tactical sizing decisions.
- Tight spreads today lead us to trim credit exposure despite healthy fundamentals.
Structure Investment Ideas Before Sizing
- Build an investment thesis from a macro view, list three supporting points, then identify key risks.
- Quantify expected returns across bull, base, and bear scenarios before sizing trades in portfolios.
