When it comes to the basic rules on how to create a portfolio for an investor, the strategic (long-term) asset allocation (SAA) is the most important part. This is because the SAA determines the risk/return profile of the portfolio over the long run and needs, therefore, to be aligned with the risk-bearing capacity of the investor. (Please see the article: “What is investment risk” for more details on this topic) Since this alignment is superordinated to the whole portfolio construction and monitoring process, the evaluation of the risk-bearing capacity is the first step when tailoring a portfolio for a specific