The architecture of Capital Allocation

The architecture of allocating capital occurs at many levels with different styles and tools.  The time horizons and tools vary based on what level one wishes to gain expertise in.  This year was rough for many traders as the macro-environment which usually plays a slower and thus perceptually smaller role for those allocating at the company and sector level reared its head in a step function manner.

When choosing to allocate capital, it is important to consider many things and many levels.  The day trader who makes 50% a year in a hyperinflation country isn't going to be ahead for example. 

I haven't seen a good graphic depicting the various hedge funds, mutual funds etc. on a capital investment horizon ranging from global macro to ultra high frequency, but it would be interesting to see the plot, vs the expertise required.  Of course expertise at all levels yields optimum returns but is rarely found. Even Buffett claims to not time markets well.

Each level also has its biases, and opportunities.  Each level operates within the context of the larger level.  The rising US debt (2008 deficit potentially at $5.1 trillion) may not concern the day trader, but the macro trader should surely be looking about for stable environments.

 Any suggestions welcomed in regards to the rules and operational scales of the architecture of allocating capital.

One thing to be wary of at the macro architectural level in is pictured below.