World Famous Comics: The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
By: William Bernstein Publisher: McGraw-Hill Average Rating: Binding: Hardcover Label: McGraw-Hill Number of Items: 1 Number of Pages: 206 Publication Date: September 22, 2000
Product Description: “Bernstein has become a guru to a peculiarly ’90s group: well-educated, Internet-powered people intent on investing well—and with minimal ‘help’ from professional Wall Street.” --Robert Barker, BusinessWeek
William Bernstein is one of today’s most unlikely financial heroes. A practicing neurologist, he used his self-taught investment knowledge and research to build a popular investor’s website. Now, in the plain-spoken The Intelligent Asset Allocator, he shows independent investors how to build a diversified portfolio—without the help of a financial advisor. A breath of fresh air for investors tired of overly technical investment tomes, this book will help investors:
Learn the risk/reward characteristics of various investment types
Understand and apply portfolio theory for an improved risk/reward ratio
Sharpen their focus, and take control of their investment programs
William Bernstein runs a website—www.efficientfrontier.com—known for its quarterly journal of asset allocation and portfolio theory, Efficient Frontier.
A Must Read for Asset Allocation Planning William Bernstein has written an excellent book on Asset Allocation. I was first introduced to the book at a local chapter of AAII. It was highly recommended by all the members who had read it.I found the book to be an easy read and held my interest all the way through.I can't say that about many books on financial subjects.His research along with the data presented as tables and graphs was easy to follow and understand.It was well worth the time and money spent.
This book is not clear. He tries to simplify the math. Result: Unclear explanations. He mentions Markowitz allocation and says that the portfolio projected using historical parameters did poorly. Then what do you do? His equal part allocation?
He apparently strongly support indexing based on poor mutual fund performance. Later he says the title of the book is in honor of Benjamin Graham. Graham taught how to choose stocks based on fundamentals. So what? Indexing or stock picking?
Frankly, I found the book a bit confuse because of he did not clearly answer the above questions.
Does not meet expectation set in the title From the title "How to Build Your Portfolio to Maximize Returns and Minimize Risk". The book fell short, by quite a large margin.
The book is a quick read and that was a bad thing. I was looking for an in depth explanation on how to build a good asset allocation. The math for pick two asset classes is explained and how those asset classes, when picked correctly, can actually decrease risk and increase performance to better either one held individually. This all makes sense and was nothing too to me, but a topic that must be covered in a book on this topic.
The problem is, there is not a systematic way to calculate the optimal risk reward profile for an entire basket of asset classes explained in the book. When the book get into explaining multiple asset classes, the explanation on how to arrive at which asset classes and what percentages of each gets wishy washy. They do provide templates asset classes you can use, but so does everyone free on the internet.
I finished this book sorely disappointed that I did not learn anything new to help build an intelligently allocated portfolio.
The best "How To" book on Investing This book is great from the perspective that it gives you a detailed look at historical returns using different investing methods and different asset classes. It takes you on a walk using statistics that leads you to the conclusion that getting into the market, staying in the market with a low cost (Trading fees and other cost associated with maintaining a portfolio) and properly allocated portfolio is the only time tested way to maximize your returns over the long term. While " A Random Walk Down Wall Street" is a great book and I recommend it as well, this book is better written with detailed reviews and supporting data.
I would say that some Excel and statistical knowledge is very helpful, but not required to understand, appreciate and utilize this book.
I bought this book two years ago and read it several times (As the writer suggest). As a result I re-allocated my portfolios and the results are great in two respects. I have smooth out volatility by using beta / Standard Deviation and improved my returns on average with proper allocation methods. Even in this crazy market of 2007 / 2008 I'm up 13%, 25% and 33% is various portfolios that I have. The methods and thought perspectives really work for the long-term investors. Highly recommended for the serious long term investor.
Efficient Frontier Explained My broker never told me what an "efficient frontier" was. Maybe he didn't know. Or maybe he thought I was too dull to know what it was. In any case, the author of this book does a good job of explaining how to set up a portfolio of different asset classes in index funds, and makes it understandable to a liberal-arts major like me. I especially like the analogy of the uncle's coin-toss retirement plan in the first chapter. Very engaging. I learned a lot of statistics theory from that simple yet profound example. Don't be intimidated by this book's title. It's a wonderful book for anyone interested in minimizing risk while maximizing return.
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