This article addresses the following key points:
Behavioral interpretation of core–satellite management incorporates cognitive biases into portfolio theory.
Rather than viewing assets as a whole portfolio, most investors place groups of assets in mental accounts, such as "college" or "retirement."
The "core" and the "satellite" of the portfolio should be determined by the client's goals.
Aligning investment strategy with client's life goals may be the key to getting clients to stick with a long-term plan.