Investors long to beat the market, and money managers accept that as their mandate. The sad reality is that most money managers underperform the market, and individual investors do even worse. Investors also face emotional challenges: The irrational exuberance of the 1990s, for instance, can as easily derail a sensible investment strategy as the market panic accompanying the Global Financial Crisis.
Since Roger Gibson wrote the first edition of this book over 25 years ago, his multiple-asset-class investment approach has given investors a disciplined strategy for mitigating risks and realizing their financial goals through widely varying market environments.
Grounded in the principles of modern portfolio theory, this fifth edition of his investing classic explains how and why asset allocation works. Gibson demonstrates how adding new asset classes to a portfolio improves its risk-adjusted returns and how strategic asset allocation uses, rather than fights, the forces of the capital markets to achieve financial success.
- The success of multiple-asset-class investing during the stock market’s “lost decade”
- Methods for forecasting long-term asset class returns and the limitations of prediction
- The dangers of market timing and the challenges involved in tactical asset allocation strategies—with insights from the field of behavioral finance
- Observations from the global financial crisis of 2008 and what it means for the multiple-asset-class investor
With more than three decades of experience managing clients’ portfolios and expectations, Gibson underscores the importance of identifying and working through the emotional and psychological traps that impede investment success.
Join the quarter-century trend of Asset Allocation providing investors with a sound approach to financial well-being.