Generate solid, long-term profits with a portfolio allocated for your investing needs
Asset allocation is the key to investing performance. Unfortunately, no single approach works perfectly―developing the right balance requires a clear-eyed look at the many models available to you, various investing methodologies, and your or your client’s level of risk tolerance. And that’s where this important guide comes in.
Written by a leading allocation expert from T. Rowe Price, Beyond Diversification provides the knowledge, insights, and approaches you need to make the best allocation decisions for your goals. This deep dive into the how’s and why’s of asset allocation is organized by the three decisive components of a successfully allocated portfolio:
- Return Forecasting discusses the desired return investors seek.
- Risk Forecasting covers the level of risk investors are prepared to assume to achieve that return.
- Portfolio Construction calibrates the stock-bond mix that balances the risks and returns.
With examples from T. Rowe Price’s asset allocation team showing you how the process works in the real world, Beyond Diversification provides everything you need to find the asset combination that will deliver the results you seek. You’ll learn how to choose the right tradeoffs, build the most effective asset allocation combination for your needs, and dramatically increase your odds of success for the long run.
Author(s): Sebastien Page
Edition: 1
Publisher: McGraw Hill
Year: 2020
Language: English
Pages: 336
City: New York
Cover
Title Page
Copyright Page
Dedication
Contents
Foreword by Rob Sharps Head of Investments & Group CIO, T. Rowe Price
PART ONE RETURN FORECASTING
1 Equilibrium and Something About Quack Remedies Sold on the Internet
2 Valuation and Something About Kool-Aid
3 Shorter-Term Valuation Signals and Something About Coffee and Egg Yolks
4 Shorter-Term Macro Signals and Something About Driving a Truck
5 Momentum and Something About Horoscopes
6 Thoughts on R eturn Forecasting and Something About the Feelings of Electrons
PART TWO RISK FORECASTING
7 Risk-B ased Investing and Something About Sailboats
8 Longer-Term Risk Forecasting and Something About Dilequants
9 Correlations and Something About a Freezer and an Oven
10 Correlation Forecasts, Tail Risks, and Something About a Rug
11 Fat Tails and Something About the Number of Particles in the Universe
PART THREE PORTFOLIO CONSTRUCTION
12 Asset Classes Versus Risk Factors and Something About Dr. Strange
13 Stocks Versus Bonds and Something About Precision Weapons
14 Single-Period Portfolio Optimization and Something About Controlled Substances
15 Private Assets and Something About Ostriches
16 Active Versus Passive and Something About the “Pharma Bro”
17 Sample Portfolios and Something About Gunslingers
Conclusion
Afterword
Acknowledgments
References and Bibliography
Index
