Adaptive Asset Allocation – A SavvyReview

I 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:

 

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.

James
 

James retired in 2005 after serving 21 years in the United States Army. During the latter part of his career, James' interest in personal finance was piqued based on his own experiences and observations of the way most Americans plan – or more accurately, fail to plan – for retirement and the difficulty many face in starting the process. His most valued education has been lessons learned from personal experience and through conversations with smart, savvy friends.

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