Initially they say that if there is Human Capital (HC) is risky and equity like, you can allocate FC to more fixed income like securities but later on they tell us to do the reverse - euiqty like securities. The schweser prof. notes tries to help but passes the burden to the CFA books. What rule to follow?
Depending on your job human capital can be either equity or bond like. If you are employed with a permanent contract and bonus is not biggest contributor to your income, then your HC is bond like. This is obvious, cause you have your current income at lower risk. If you are an entrepreneur or someone who’s income depends on the financial markets (trader, sales, researcher), then your HC is equity like.