Adaptive Asset Allocation: A SavvyReview

Adaptive Asset Allocation CoverI looked forward to reading this book as the practice of properly allocating assets is critical for investors working toward a given financial goal such as retirement. ‘Asset Allocation’ is one of the first practices I learned on my own journey to financial freedom.

The authors of Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad, Michael Philbrick, Adam Butler, and Rodrigo Gordillo are the President, CEO and Managing Partner, respectively, at ReSolve, a Toronto-based asset management company.

Following the Acknowledgements, the authors get right down to business, opening the book with Part I, The Philosophy of Successful Investing. The reader will finish the book 206 pages later, having covered 40 chapters, split into 5 parts.

The authors do a nice job of setting up the ‘why’ you need to practice asset allocation and why you must be adaptive in your approach in the first three parts, which cover the first twenty-four chapters. The text is augmented nicely by numerous charts and graphs.

This ‘U.S. Total Stock Market’ graph, used during the discussion of ‘The Permanent Portfolio’ in Chapter 29 provides a good example:

U.S. Total Stock Market - Graph

To start the fourth part of the book, the authors note strategic asset allocation or a buy-and-hold strategy might work during certain periods, but they suspect that will not be the case over the next 5 – 20 years. This upcoming period will require the adaptive asset allocation (AAA) framework which provides flexibility, responsiveness, and adaptability.

Unfortunately, the last two parts do not make it abundantly clear how a reader should go about working within the defined AAA framework. A more thorough explanation would have been useful.

If you want to get a detailed opinion about why asset allocation, specifically adaptive asset allocation, is a must for investors over the next decade or so, this is a book you might consider owning.

Available at Amazon in Kindle ($13.00) and Hardcover ($22.61) formats.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

10 Comments

  1. Thanks for sharing! Will be adding this to my must reads soon!

    • Looking forward to hearing your thoughts once you’ve had a chance to check it out. Thanks for stopping by, my friend.

  2. Hey a review on asset allocation, that’s cool. There’s no real education in how to implement allocation changes, and when to do it, that people just prefer leaving things as is. Anyways thanks for the short review.

    • It sounds as if this is a book that might provide you some useful information and guidance. Looking forward to hearing your thoughts if you decide to check it out. Thanks for stopping by, my friend.

  3. Google brought me to a website where the authors stated they’re launching a robo-adviser to help implement the strategies in the book. That seems like a good step if they want to persuade people to try it their way. It also looks like they have a lot of empirical evidence to back up their theories. But I don’t think I want to test the waters. Then again, if someone like Wade Pfau were to recommend these strategies, I might pay closer attention.

    • As with most things, there are good and bad aspects to robo-advisers. On the plus side, letting software and algorithms handle the legwork is convenient and removes emotion. On the negative side, investors might become too disconnected from their portfolio. It’s always good to know the underlying function and factors; and to stay engaged.

      Thanks for stopping by, my friend and sharing your thoughts.

  4. Interesting concept!
    So many people talk about how they predict that growth will be slower in the near future.
    Interesting to hear how the authors think they can succeed in investing despite this prediction.

    • “So many people talk about how they predict that growth will be slower in the near future.” Indeed. A lot of what I read suggests the next decade will be pretty anemic. All investors, particularly younger ones, might find value in an AAA approach as they continue to build their nest egg.

      Thanks for stopping by and sharing your thoughts, my friend.

  5. Thanks for sharing James. I haven’t read this one, but it’s now on my list. I hope your week is going well! Take care 🙂

    • The book definitely provides food for thought with respect to asset allocation. I would love to see the price come down a little, making the purchase more palatable.

      Be well, my friend and thanks for dropping by.

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