After asset allocation and rebalancing, one of the tasks on the short list of strategic-minded portfolio design and management is developing reasonable assumptions about risk premiums. In fact, all three are intimately linked. You can hardly make informed decisions about any one without spending some time analyzing the other two. Forecasting is challenging, of course, to say the least. But it’s also necessary and inevitable. Investing by nature is a process of making decisions about the future, and so the price of doing business in the money game is developing assumptions.