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Black-Litterman Model
A method that blends market-implied returns with your own opinions about which assets will do better, producing more intuitive portfolios than raw mean-variance.
Developed by Fischer Black and Robert Litterman at Goldman Sachs, this Bayesian approach starts from equilibrium returns implied by the market portfolio, then tilts those returns toward investor views with a confidence weighting. The result avoids the extreme corner allocations that plague pure mean-variance.
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