Intelligent Asset Allocator

About the suthors
William Bernstein is the author of The Four Pillars, and publishes articles on portfolio theory on his website Efficient Frontier.

Table of contents
Chapter 1: General Considerations

Chapter 2: Risk and Return

Chapter 3: The Behavior of Multiple-Asset Portfolios

Chapter 4: The Behavior of Real-World Portfolios

Chapter 5: Optimal Asset Allocation

Chapter 6: Market Efficiency

Chapter 7: Odds and Ends

Chapter 8: Implementing Your Asset Allocation Strategy

Chapter 9: Investment Resources

Appendix A: Becoming Your Own Portfolio Analyst

Appendix B: Correlation Coefficients Among Asset Classes

Book summary
The first two chapters provide an overview of risk, standard deviation, and return, and discusses historical risk/return of T-bills, treasuries, stocks, REITS, small and value stocks, international, emerging markets stocks, and precious metals.

The next two chapters discuss correlation, and how mixing assets can improve risk-adjusted returns. It also talks about the efficient frontier.

Chapter 5 talks about constructing a portfolio, taking into account the investors risk-tolerance and desire for simplicity. It mentions the diminishing returns as additional asset classes are added. Several sample portfolios are outlined.

Chapter 6 talks about efficient markets, active management, taxes and concludes that indexing is the most rational way to invest.

Chapter 7 discusses value investing and the three factor Fama and French model, and also talks about currency risk and hedging.

Chapter 8 goes into more detail of model portfolios, using DFA and Vanguard funds. Tax implications are discussed, and both simple and more complex portfolio models are offered.

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