5 Great Books to Learn Asset Allocation

Asset allocation is both an art and a science. It is hardly as easy though as reading a few blog posts and being comfortable with the topic. It is so commonly misunderstood and used incorrectly to mean diversification. Understanding asset allocation though is paramount in a successful career in investing but, useful for the rest of ones life. Here are five great books to get you started in asset allocation and then master it!
Asset Allocation

All About Asset Allocation by Richard A. Ferri

This was the first book I read about asset allocation. It was the best introduction to the topic but did not stop there. It likes to touch on a variety of topics that will interrelate with asset allocation throughout the average persons life. The language is written for the most absolute beginner but skillfully builds on what the author teaches the reader, respecting you as you learn.

The Little Book that Still Saves Your Assets by David M. Darst

Authors covering their butts after the 2008 world financial crash is all the rage. Most are going back to their books, editing out a chapter or language, adding an intro about how they predicted it. The wonderful thing about Darst is that he not only recognized the dangerous allocation of investors pre-2008 but, also built a strategy to avoid those kinds of catastrophe. This book reminds the investor of old school value investors like Buffett, with a modern spin.

The Intelligent Asset Allocator by William Bernstein

Bernstein could easily be considered the hero of asset allocation for beginners, busy people and those who are just too afraid to trust a financial adviser for help. The professional neurologist, writes from personal experience, of trying to figure out asset allocation first hand. He introduces mathematical formulas and coefficients (essentials) very slowly but in a respectful and intelligent way. This is book is perfect for the everyday professional.

The Sector Strategist by Timothy J. Mcintosh

Buying international stocks is not diversification and may not add to the benefit of your asset allocation. Mcintosh, brings an incredibly fresh take on asset allocation, the author looks at traditional methods of assessment and allows the reader to make a decision based on sector risk. What is incredibly refreshing is the effort that is made to look at unconventional instruments such as REIT’s and alternative investments. This book relies heavily on examples of how history illustrates trends, an important piece of research in the financial markets.

Frontiers of Modern Asset Allocation by Paul D. Kaplan

Taking where Bernstein and Mcintosh left off, Kaplan asks the most important questions about Asset Allocation: what is included? What constitutes asset allocation? Are we allocating across sector, geography, or market cap?

This book is really about expanding the research done on asset allocation and putting theories to work. It should be read after one is well acquainted with the practice. This book is a gem of the modern financial markets, highlighting many practices we see today from some of the biggest names in investing (MorningStar).

Leave a Reply

Your email address will not be published. Required fields are marked *