Practical considerations

While most of our analysis is abstract and theoretical, to use it in practice there are limitations and adjustments to be made:

• Many asset classes may be difficult or expensive to access certain asset classes due to lack of capital
• There may be income that needs to be taken into account, in particular labor income (human capital)
• Taxes can have a distorting effect
• The value of money may change throughout time

The adjustments can be as varied as each individual, company, institution and jurisdiction. This generally falls under “financial planning”. Having an optimal theoretical portfolio is a good starting point.