{"product_id":"portfolio-design-isbn-9780470931233","title":"Portfolio Design","description":"\u003cp\u003e\u003ci\u003ePortfolio Design\u003c\/i\u003e – choosing the right mix of assets appropriate to a particular investor – is the key to successful investing. It can help you accumulate wealth over time, while cushioning the blow of possible economic downturns. But in order to successfully achieve this goal, you need to be familiar with all of the major asset classes that go into modern portfolios and learn how much they add to portfolio diversification. Thoughtful asset allocation provides discipline to the investment process and gives you the best chance of building and safeguarding wealth. Wharton Professor Richard C. Marston, 2014 recipient of the Investment Management Consultants Association’s  prestigious Matthew R. McArthur Award, will guide you through the major decisions that need to be made when designing a portfolio and will put you in the best position to balance the risk-reward relationship that is part of this endeavor. \u003c\/p\u003e \u003cp\u003e\u003ci\u003ePortfolio Design\u003c\/i\u003e is to be read by investment advisors. The book is rich in information about individual asset classes, including both traditional assets like stocks and bonds as well as alternative assets such as hedge funds, private equity, real estate, and commodities. So it should appeal to all sophisticated advisors whether or not they are trying to qualify for one of the major investment designations. In fact, the book is designed to be read by any advisor who is as fascinated as Marston by the investment process.\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgements xv\u003c\/p\u003e \u003cp\u003eAbout the Author xvii\u003c\/p\u003e \u003cp\u003eAbout the Book xix\u003c\/p\u003e \u003cp\u003eDisclaimers xxi\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 1 Asset Allocation 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIngredients of Asset Allocation 3\u003c\/p\u003e \u003cp\u003eLessons of the Recent Downturn 6\u003c\/p\u003e \u003cp\u003eSo Are Bonds the Place to Invest? 10\u003c\/p\u003e \u003cp\u003eSo What Happens When the Economy Turns Up? 13\u003c\/p\u003e \u003cp\u003eSome Necessary Tools for Analysis 15\u003c\/p\u003e \u003cp\u003eAppendix: Description of the Statistical Tools 16\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 2 Long-Run Returns on Stocks and Bonds 21\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStocks and Bonds Since 1951 22\u003c\/p\u003e \u003cp\u003eHow Much More Attractive Are Stocks than Bonds? 24\u003c\/p\u003e \u003cp\u003eReal Returns 25\u003c\/p\u003e \u003cp\u003eReconsidering Bond Returns 27\u003c\/p\u003e \u003cp\u003eReconsidering Stock Returns 30\u003c\/p\u003e \u003cp\u003eAlternative Estimates of Long-Run Stock Returns 32\u003c\/p\u003e \u003cp\u003eUpper and Lower Bounds for Equity Returns 35\u003c\/p\u003e \u003cp\u003eAppendix: Alternative Estimates of Stock Returns 36\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 3 Small-Cap Stocks 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Do We Mean by Small-Cap Stocks? 43\u003c\/p\u003e \u003cp\u003eRelative Performance of Large-Cap and Small-Cap Stocks—Russell Series 45\u003c\/p\u003e \u003cp\u003eRelative Performance of Large-Cap and Small-Cap Stocks—SBBI Series 48\u003c\/p\u003e \u003cp\u003eRelative Performance of Large-Cap and Small-Cap Stocks—Broader Analysis 50\u003c\/p\u003e \u003cp\u003eLarge-Cap and Small-Cap Stocks in a Portfolio Context 52\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Small-Cap Stocks 55\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 4 Value and Growth Investing 57\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDescription of the Russell 1000 Indexes 57\u003c\/p\u003e \u003cp\u003eRelative Performance of Growth and Value Indexes 59\u003c\/p\u003e \u003cp\u003eValue and Growth Indexes for Earlier Periods 64\u003c\/p\u003e \u003cp\u003eRelative Performance of Small-Cap Growth and Value Stocks 65\u003c\/p\u003e \u003cp\u003ePortfolios with Growth and Value 69\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Growth and Value Stocks 71\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 5 Foreign Stocks 73\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReturns on Foreign and U.S. Stocks 75\u003c\/p\u003e \u003cp\u003eCurrency Capital Gains and Foreign Stock Returns 79\u003c\/p\u003e \u003cp\u003eDiversification Benefits of Foreign Stock Investing 85\u003c\/p\u003e \u003cp\u003eAre There Shortcuts to Owning Foreign Stocks? 90\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Foreign Stocks 93\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 6 Emerging Markets 97\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Is An Emerging Market? 98\u003c\/p\u003e \u003cp\u003eEmerging Stock Market Indexes 101\u003c\/p\u003e \u003cp\u003eEmerging Stock Market Returns 103\u003c\/p\u003e \u003cp\u003eRisks of Investing in Emerging Stock Markets 107\u003c\/p\u003e \u003cp\u003eEmerging Market Bonds—A Brief History 113\u003c\/p\u003e \u003cp\u003eReturns on Emerging Market Bonds 114\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Emerging Market Stocks and Bonds 117\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 7 Bonds 121\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTreasury Bonds 122\u003c\/p\u003e \u003cp\u003eThe Wider U.S. Bond Market 127\u003c\/p\u003e \u003cp\u003eReturns on U.S. Bonds 131\u003c\/p\u003e \u003cp\u003eBond Markets Outside the United States 133\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Bonds 140\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 8 Strategic Asset Allocation 143\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eExpanding the Portfolio to Include Other Bonds and Stocks 145\u003c\/p\u003e \u003cp\u003eExpanding the Portfolio to Include Foreign Stocks 147\u003c\/p\u003e \u003cp\u003eThe Dirty Secret of Optimization 150\u003c\/p\u003e \u003cp\u003eAlternative Approaches to Optimization 154\u003c\/p\u003e \u003cp\u003eEstimating Portfolio Returns—the Premium Method 155\u003c\/p\u003e \u003cp\u003ePortfolios in Practice—Example of MarketWatch.com’s Lazy Portfolios 159\u003c\/p\u003e \u003cp\u003eBeyond the Traditional Efficient Frontier 163\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 9 Hedge Funds 167\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eInvestment Strategies 169\u003c\/p\u003e \u003cp\u003eHedge Fund Returns 172\u003c\/p\u003e \u003cp\u003eHedge Fund Biases 178\u003c\/p\u003e \u003cp\u003ePerformance Across Managers 181\u003c\/p\u003e \u003cp\u003eFund of Funds 182\u003c\/p\u003e \u003cp\u003eHedge Funds in a Portfolio 186\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Hedge Funds 187\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 10 Venture Capital and Private Equity 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCommon Features of Venture Capital and Buyout Funds 192\u003c\/p\u003e \u003cp\u003eVenture Capital 195\u003c\/p\u003e \u003cp\u003eReturns on Venture Capital 198\u003c\/p\u003e \u003cp\u003eBuyout Funds 205\u003c\/p\u003e \u003cp\u003eReturns on Buyout Funds 207\u003c\/p\u003e \u003cp\u003eKey Features of Private Equity 211\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 11 Real Assets—Real Estate 213\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReal Estate Investment Trusts 214\u003c\/p\u003e \u003cp\u003eDirect Ownership of Real Estate 220\u003c\/p\u003e \u003cp\u003eHome Ownership 223\u003c\/p\u003e \u003cp\u003eConcluding Remarks 231\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 12 Real Assets—Commodities 235\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSources of Return on Commodity Futures 236\u003c\/p\u003e \u003cp\u003eReturns on Commodity Futures 239\u003c\/p\u003e \u003cp\u003ePerformance in a Portfolio 245\u003c\/p\u003e \u003cp\u003eDoes Gold Belong in the Portfolio? 249\u003c\/p\u003e \u003cp\u003eActive Investment in Commodities—Managed Futures 251\u003c\/p\u003e \u003cp\u003eSummary—Key Features of Commodity Investments 253\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 13 Asset Allocation with Alternative Investments 257\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDiversifying into Real Estate—Alternatives for Ordinary Investors 258\u003c\/p\u003e \u003cp\u003eExpanding the Menu of Alternative Assets 262\u003c\/p\u003e \u003cp\u003eHigh Net Worth (HNW) Portfolios 264\u003c\/p\u003e \u003cp\u003eUltra HNW Portfolios 266\u003c\/p\u003e \u003cp\u003eLessons about Alternatives from the Yale Endowment 269\u003c\/p\u003e \u003cp\u003eLessons about Alternative Investments Learned in the Financial Crisis 277\u003c\/p\u003e \u003cp\u003eVerdict on Alternative Investments 280\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 14 Investing and Spending by Foundations 285\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSpending Rules 286\u003c\/p\u003e \u003cp\u003eEstimating Future Bond and Stock Returns 288\u003c\/p\u003e \u003cp\u003eVolatility and Uncertainty 288\u003c\/p\u003e \u003cp\u003ePortfolios of Stocks and Bonds 290\u003c\/p\u003e \u003cp\u003eDescription of the Spending Plan 291\u003c\/p\u003e \u003cp\u003eUsing Historical Returns Since 1951 to Set Spending Rules 292\u003c\/p\u003e \u003cp\u003eEffect of Lower Stock Returns on Spending Rules 294\u003c\/p\u003e \u003cp\u003eEffects of Different Stock\/Bond Allocations 296\u003c\/p\u003e \u003cp\u003eConcluding Comments 299\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 15 Investing and Spending in Retirement 303\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLongevity 306\u003c\/p\u003e \u003cp\u003eSpending Rules for Retirement 308\u003c\/p\u003e \u003cp\u003ePortfolios of Stocks and Bonds 309\u003c\/p\u003e \u003cp\u003eBaseline Case: Can Two Live More Cheaply Than One? 310\u003c\/p\u003e \u003cp\u003eEffects of Bequests and Variable Spending Rules 311\u003c\/p\u003e \u003cp\u003eHow Can I Turn a Defined Contribution Plan into a Defined Benefit Plan? 313\u003c\/p\u003e \u003cp\u003eConcluding Comments—Postpone Retirement? 314\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 16 The Discipline of Asset Allocation—Rebalancing 319\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRebalancing Defined 320\u003c\/p\u003e \u003cp\u003eRebalancing When Times Are Good 321\u003c\/p\u003e \u003cp\u003eRebalancing When Times Are Bad 323\u003c\/p\u003e \u003cp\u003eReferences 325\u003c\/p\u003e \u003cp\u003eIndex 331\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eRICHARD C. MARSTON\u003c\/b\u003e is currently James R.F. Guy Professor of Finance and Director, George Weiss Center for International Financial Research at the Wharton School, University of Pennsylvania. He was a recipient of the Rhodes Scholarship, Fulbright Fellowship, and the Sanwa Bank Prize in International Finance. He has been a research associate for the National Bureau of Economic Research since 1979, a visiting professor at London Business School, ESSEC in Paris, and the Sasin Institute at Chulalongkorn University in Bangkok, and Visiting Scholar at the Bank of Japan. Since 1999, he has been Academic Director of the Private Wealth Management Program at Wharton, a week-long program for ultra-high-net-worth investors, and he is a long-standing faculty member in the Certified Investment Management Analyst program at Wharton, having taught asset allocation to over 5000 financial advisors.   \u003c\/p\u003e\u003cp\u003ePortfolio design—choosing the right mix of assets appropriate to a particular investor—is the key to successful investing. It can help you accumulate wealth over time, while cushioning the blow of possible economic downturns. But in order to successfully achieve this goal, you need to be familiar with all of the major asset classes that go into modern portfolios and learn how much they each add to portfolio diversification. \u003c\/p\u003e\u003cp\u003eThis book is about the individual assets in a portfolio, and how they perform together in a portfolio. For example, what does real estate or private equity add to a portfolio? And nobody understands this better than author Richard Marston—director of the Private Wealth Management program at Wharton—whose extensive academic and professional asset allocation experience gives him a comprehensive perspective of this dynamic discipline. \u003c\/p\u003e\u003cp\u003eBased on sessions Marston developed for the Certified Investment Management Analyst\u003csup\u003eSM\u003c\/sup\u003e (CIMA\u003csup\u003e®\u003c\/sup\u003e) program at Wharton, \u003ci\u003ePortfolio Design\u003c\/i\u003e is written for financial advisors who want to provide diversified portfolios for their clients—whether the clients are high-net-worth individuals or institutional investors. Rich in information about individual asset classes, including traditional assets like stocks and bonds as well as “alternative investments” such as hedge funds, private equity, real estate, and commodities, this book offers a fresh look at asset allocation, and discusses its importance in today’s investment environment. Page by page, this book: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eOutlines methods for estimating long-run returns for a diversified portfolio\u003c\/li\u003e \u003cli\u003eExamines the roles that value, growth, and small-cap stocks play in a portfolio\u003c\/li\u003e \u003cli\u003eDiscusses the importance of investing in foreign equities and emerging stock markets\u003c\/li\u003e \u003cli\u003eExplores the modern fixed-income market in detail\u003c\/li\u003e \u003cli\u003eAssesses the effect alternative investments can have on a portfolio\u003c\/li\u003e \u003cli\u003eDetails feasible spending rules for foundations as well as individuals facing retirement\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003eThoughtful asset allocation provides discipline to the investment process and gives you the best chance of building and safeguarding wealth. This book will guide you through the major decisions that need to be made when designing a portfolio and will put you in the best position to balance the risk-reward relationship that is a part of this difficult endeavor.   \"Wharton professor Richard Marston has captivated investors and investment professionals for over thirty years, including the 600 ultra-high-net-worth investors who have completed Wharton's five-day Private Wealth Management program. Never boring, and always practical, Dick Marston knows both institutional investors and individual investors well—their concerns and challenges. Portfolio Design will no doubt become a timeless reference for any serious investor.\"\u003cbr\u003e —Charlotte Beyer, founder and CEO, Institute for Private Investors  \u003c\/p\u003e\u003cp\u003e\"Richard Marston's tremendous insight into building well-diversified and successful investment portfolios has benefited a generation of financial advisors and individual and institutional investors. Marston offers a dynamic and cutting-edge understanding of the asset allocation process.\"\u003cbr\u003e —Phil C. Shaffer, CIMA, Managing Director, Graystone Consulting, Morgan Stanley Smith Barney\u003c\/p\u003e \u003cp\u003e\"After taking a bruising the past couple of years, many advisors who only learned the basics of asset allocation have too quickly dismissed the science of effective portfolio design. Many of these advisors have turned their back on the essential knowledge, tools, and skills for a new age of sophisticated investors. For more than twenty-three years, the best and brightest financial advisors in the world have learned asset allocation and portfolio design strategies from Dr. Marston on their path to become Certified Investment Management AnalystSM (CIMA®) practitioners, the premier credential for investment consultants. Advisors who are serious about serving their clients' investment objectives will consume this book from cover to cover.\"\u003cbr\u003e —Sean R. Walters, CEO\/Executive Director, Investment Management Consultants Association®, the credentialing body for CIMA® certification\u003c\/p\u003e \u003cp\u003e\"Dick has done it again! He has synthesized a vast body of knowledge into an incisive foundational tome for financial advisers. He uses the prism of historical returns to make sense of recent downturns and dispels common myths in various asset classes. For financial advisers seeking a solid foundation on which to base their advice, Portfolio Design is a must-read.\"\u003cbr\u003e —Stephen M. Horan, PhD, CFA, Head, Professional Education Content and Private Wealth, CFA Institute\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989816590565,"sku":"NP9780470931233","price":60.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470931233.jpg?v=1761785565","url":"https:\/\/k12savings.com\/products\/portfolio-design-isbn-9780470931233","provider":"K12savings","version":"1.0","type":"link"}