Portfolio Construction for Today's Markets: A practitioner's guide to the essentials of asset allocation

by Russ Koesterich

For most of the past 50 years the simplest asset allocation solution was often the best. A balanced portfolio of stocks and bonds provided the investor with good returns. Unfortunately, this approach is not likely to work as well in the future. Interest rates are close to historic lows, equity valuations and bond prices appear stretched, and global economic growth has slowed. Investors need a new asset allocation solution.

In Portfolio Construction for Today's Markets, BlackRock Portfolio Manager and investment expert Russ Koesterich addresses this problem by describing the step-by-step approach to building a portfolio consistent with investor goals and suited to today's market environment.

This portfolio construction process is divided into six stages, beginning with setting objectives and moving through assessing risk tolerance, diversification, the importance of factors, generating return assumptions, and combining assets in a risk-controlled manner. In the final chapter, Mr Koesterich presents a highly useful summary of the five fundamental rules of asset allocation and a five-step checklist to follow when constructing portfolios.

For investors and their advisors constructing portfolio in today's markets, this book is an indispensable new guide.

Genres: Finance

248 pages, Hardcover

Published April 27, 2018

Reviews

[Ferhat Culfaz · Rating 4 out of 5]

Explains psychology, aims, and objectives very well. Especially what factors influence the allocation using Mean Variance Optimisation for various asset classes, and the dynamics when you change the estimate for returns and risk.

[Rahim Hussain · Rating 4 out of 5]

Bit dry but interesting enough book on portfolio construction. Not too boring. Probably learnt more from that than CFA, go figure.