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Asset allocation Model is now and then has always been a buzz word and we have learnt to advise through an asset allocation model and stick to it and that is what is followed broadly in all organised wealth Management outfits. Theoritically it sounds appropriate and is not debatable. Practical constraints:: Real life scenario:: Based on above principal we devised an asset allocation model for a retired client who is very conservative as equity 10% debt 80% and cash 10%(strategic asset allocation) with an expected ROI estimation shared to him that he agreed upon. we planned with a note:: that if market valuations are attractive we might tactically increase allocation in equity. Market gave an opportunity and exposure to equity increased to 30% ,then markets went up and portfolio returns boosted to more than expected estimation. Client was happy,we were happy as an advisor and then portfolio was realigned again to original strategic allocation (client risk profile is still same).. Scenario 1:: post realigning of portfolio,Markets went on moving up and with reduced equity portfolio client realised he lost substantially as an opportunity cost and the next year returns were relatively much leaser than previous year where in equity exposure was increased but still met original expectations. what went wrong:: Client was not satisfied and at the back of his mind raised his expectations on returns and believed advisors could do their task better (for client we are advisors with some extra sense and ability of visualising the furure situation and proactively taking a tuned call for better returns) Client is not satisfied. Scenario 2:: Before we thought of realigning a portfolio to original strategic allocation market went down substantially and client saw a substantial loss on notional profit he has seen in his portfolio but still returns are more than original estimation.. Client Reaction:: Advisors could do better as according to him he has lost the wealth which he could have realised may be that was not a part of original planning but is a loss. Client is not satisfied:: Conclusion :: Behavior of client changes sporadically, which gets difficult to manage because we as human see and judge every performance as relative performance and have a very short lived memory so the last experience is the fresh and live experience and based on it views are eatablished towards an advisory. So asset allocation solution to manage is little easier said than done. and i think to understand changing human behaviour is very significant and we need to tweak our actions accordingly. Comments are welcome.