Behavioral Allocation Theory

Posted: 15 Jun 2022

See all articles by Michael Blumeyer

Michael Blumeyer

Pepperdine University; Pepperdine University, Students

Date Written: May 30, 2022


This paper takes a step towards managing the psychographics in portfolio management to try to predict behavioral decisions in a client's risk tolerance. Is it possible to manage multiple portfolios of clients with a symmetric range of investing philosophies? Also, would it be beneficial to both the client and the hedge fund manager if the client was risk-seeking in a way to "explore" different investing philosophies, in contrast to only executing well within one framework of a particular investing strategy? Lastly, would it be beneficial for the hedge fund manager to have two clients with two opposing investing philosophies so that if there were a dearth of shares in the market due to low volatility, one client could long the same shares that the other client would want to short? This paper explores the in-between areas of such "don't worry about it" topics.

Keywords: investing, investing philosophy, portfolio management, portfolio, markowitz, sharpe, stanford, pepperdine, asset allocation, security selection, security analysis, portfolio theory, behavior

Suggested Citation

Blumeyer, Michael and Blumeyer, Michael, Behavioral Allocation Theory (May 30, 2022). Available at SSRN:

Michael Blumeyer (Contact Author)

Pepperdine University, Students ( email )

Malibu, CA
United States


Pepperdine University ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States


Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics