Intelligent Asset Allocator

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Intelligent Asset Allocator
Intel AA.jpg
AuthorWilliam Bernstein
Publication date
Hardcover: September 2000
Pages206 pp (Hardcover)
ISBN978-0071362368 (Hardcover)

Intelligent Asset Allocator (full title: The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk)

About the author

William Bernstein is the author of The Four Pillars, and other books, and publishes articles on portfolio theory on his website Efficient Frontier .[1]

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

"Market timing and security selection are obviously important. The problem is that nobody achieves long-term success in the former, and almost nobody in the latter. Asset allocation is the only factor affecting your investments you can actually influence."
-- The Intelligent Asset Allocator, preface

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.

Readers comments

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