The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk…

Hardcover | October 13, 2000

byWilliam J. Bernstein

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“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 programsWilliam Bernstein runs a website—www.efficientfrontier.com—known for its quarterly journal of asset allocation and portfolio theory, Efficient Frontier.

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From the Publisher

“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, BusinessWeekWilliam Bernstein is one of today’s most unlikely financial heroes. A practicing neurologist, he used his self-taught investment kno...

From the Jacket

Time-Tested Techniques - Safe, Simple, and Proven Effective - for Building Your Own Investment Portfolio."As its title suggest, Bill Bernstein's fine book honors the sensible principles of Benjamin Graham in the Intelligent Investor Bernstein's concepts are sound, his writing crystal clear, and his exposition orderly. Any reader who ta...

William Bernstein (North Bend, OR) runs a website--www.efficientfrontier.com--known for its quarterly journal of asset allocation and portfolio theory, Efficient Frontier.

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Format:HardcoverDimensions:206 pages, 9.3 × 6.3 × 1 inPublished:October 13, 2000Publisher:McGraw-Hill EducationLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0071362363

ISBN - 13:9780071362368

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Customer Reviews of The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk: How to Build Your Portfolio to Maximize Returns an

Reviews

Rated 4 out of 5 by from Intelligence Driven By Analysis Rather Than Philosophy Neurologist William Bernstein is an unlikely guide to experienced investors with both this comprehensive book and his excellent efficientfrontier website, but he succeeds admirably, perhaps in part because he is a Wall Street outsider with a keen eye for data viewed through a skeptic’s lens. The Intelligent Asset Allocator - more than a dozen years old now - is very well organized, building logically from broad foundational concepts to practical advice for investors, with an helpful concluding section on further investment resources. Bernstein starts with a clear discussion of risk and return, and then outlines the theoretical (in particular the work of Fama & French) and actual behaviour of multi-asset portfolios. He then covers market efficiency and concludes with practical and precise (he prefers Vanguard whenever possible) recommendations of how best to invest. Bernstein’s premise is clear from the opening pages, “Asset allocation is the only factor affecting your investments that you can actually influence.” He cites asset classes such as money market, short term bonds, long term bonds, emerging market stocks, and the value and growth options within domestic, foreign, and small company stocks. He notes both the unpredictability of their returns and that past performance is not necessarily a predictor of future performance (at least not over an investor’s time horizon), but nonetheless recommends different asset mixes based on these historic returns and their correlations. How can he not - it’s the central point of his book - though as Bruno Solnik observed “diversification fails us when we need it most” (i.e. in a market crash). Though Bernstein is careful to highlight the inherent uncertainty in markets and that some of his analysis or recommendations are based on probabilities rather than facts, the book may still leave readers with the unrealistic impression of a paved road to financial success. In fact, it’s closer to sailing to a destination, unsure of the winds and weather, and of our ability to withstand them. As financial weatherman Nassim Taleb has noted, one hundred year storms seem to appear in markets with surprising frequency. To Bernstein, who is very comfortable with a spreadsheet, the forecast is perhaps too analytical and not philosophical enough. Though much has changed since the book’s publication - it was written before the advent of fundamental indexing, and the number of Exchange Traded Funds (ETFs) available today is as large as the number of individual stocks - its principled approach ensures it stands the test of time well. Mr. Bernstein’s more recent publications are more philosophical and thought provoking, but knowledgeable investors would be hard pressed to find a better, more practical and comprehensive guide than The Intelligent Asset Allocator. An updated edition to include his recent work would be very welcome.
Date published: 2014-12-27

Extra Content

Table of Contents

General Considerations.

Risk and Return.

The Behavior of Multiple-Asset Portfolios.

The Behavior of Real-World Portfolios.

Optimal Asset Allocations.

Market Efficiency.

Odds and Ends.

Implementing Your Asset Allocation Strategy.

Investment Resources.

Appendices.

Editorial Reviews

A practicing neurologist in remote coastal Oregon, Bernstein comes to the problems of saving and investing not from a broker's perspective, but as someone who had to figure this out himself, from first principles up.