The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk Paperback – Illustrated, August 19, 2017

The Intelligent Asset Allocator sits right next to 'Stocks for the Long Run' and 'The Intelligent Investor' on my bookshelf; it's a classic.I enjoy thinking about asset allocation and how to best structure a portfolio. No matter what studies you may trust the most, asset allocation is clearly a major driver of portfolio returns. This book invites you to deconstruct your assumptions and build them back up again. I would have liked a book ten times as long, but then I really enjoy seeing all the intricacies. Even so, there is a lot hinted at in these pages that gives you further directions to explore. Even if you are familiar with diversification, various asset classes, portfolio theory and the reasons for indexing, there is a lot of value here. I will admit the book is growing somewhat dated with respect to the time frame it discusses, but the book loses nothing in relevance.I am still building assets, and because this book referenced both standard and aggressive growth portfolios (I employ a portfolio very similar to the 'Madonna' Portfolio he mentions, with a couple key differences), I knew I was on the same trail as the author, which was incredibly gratifying for me. For those with different backgrounds, the insights you find relevant may differ.I will say the book would benefit from a greater discussion of various portfolios. How important is it to mimic the market (or rather, what is the risk associated with failing to look like the market, which is true to some degree of every portfolio?) What is the role of TIPS in a portfolio (or rather, when does Inflation become a central risk? I maintain that you only need them in retirement, but am eager to hear different opinions.) How much risk should you take with the credit portion of your portfolio (I use intermediate term treasuries myself - covariance vs equities is just too superior not to, even with the risk of rising rates. Again, I like to hear other opinions.)With reference to portfolios I've read about: the 'Gone Fishing Portfolio' was also amazingly comprehensive, if not as focussed on portfolio building as the IAA, and the portfolio it proposes is pretty solid. Swenson's books are very good, and his suggested portfolio is top notch, if history is any judge. Swedroe suggests a pretty bullet-proof portfolio, so even though returns won't blow you out of the water, they should be solid, and the ride should be serene (which can be very important in a retirement portfolio, as lack of volatility both increases SAFEMAX and decreases the odds of running out of money early... i.e. the trade-off for lower returns can yield a higher cash flow.) All of these authors are worth the read.

By chance, this was the first investing book I ever read. That was in 2001, and I've read a lot of investing books since then. None of them compare to The Intelligent Asset Allocator. This one will be a tough read for some people, but it is absolutely worth the effort. I've lost track of how many copies of this book I've given away.

Great analysis and explanations, but the portfolios don't prove out in real life. The more complex the portfolio, the worse it has performed in past 10 years. I back tested them on Portfolio Analyzer. This is more evidence that people are cherry picking based on past performance and there's no strong reason to think it will continue.

You can make a lot of money in the stock market. You can also lose a lot of money; this book explores modern thinking about the tradeoffs that determine risk and return in investing. Starting from the premise that statistical analysis provides the tools needed to evaluate risk, the author proceeds from there to present analyses based on modern research in economics and finance.The average investor may not like the authors premise, since it surmises that markets are reasonably efficient in pricing asssets and that the average investor faces very daunting odds when trying to outperform the market. The analyses fly in the face of most popularly available investing advice, which dwells on predicting trends, picking stocks and market timing. Most investors believe that they can predict the market to some degree (see Bernstein's "Four Pillars" book on overconfidence, or one of the previous reviewers), but Bernstein contends that the market performs in surprising ways that prevent the prediction of returns over short periods.The evidence for this unpredictability, provided in this and the author's other works (The "Pillars" book and his web site, The Efficient Frontier) is compelling. How much risk does the investor endure while modeling the market based on previous performance? Some aspects of risk and return for broadly defined asset classes are quantifiable, and these quantitations are discussed in the present volume.My criticisms are minor; I think the author foreshadows the text's math difficulty way too much (most of the public is math averse, I hear). You might read the "Pillars" book first if you are uncertain of your math skills ... anyone familiar with topics like covariance and autocorrellation will breeze through the math in this book. The disclaimer (after some buildup) of MVO backtesting in the middle of the book is a bit of a letdown, but the allocation strategies in the "Pillars" book undo that to some degree. Otherwise, an enthusiastic recommendation. I recommend that every investor read this or the "Pillars" book and apply these ideas carefully and objectively to their own investment strategy.

Really good overview of Asset Allocation, especially about diversification through assets, titles and metals (gold). Easy to read, filled of practical experiences and wise examples. Chapters 1 and 2 worth the payment!And what I think to be the best feature: IT'S WRITTEN FOR INDIVIDUAL INVESTORS, not corporate ones. So the book doesn't assume you have millions of dollars. Instead, author repetitively says that you need to take care about transaction costs and taxes.If you are a personal investor and wants to get some new knowledge about asset allocation, this book is a good starting point.But be awarded: It's a introductory reading, but not an easy one. Content is deep and clever, and author says (and I absolutely agree) that you shouldn't read more than one chapter a day.