Focusing on a new movement in alternative investing, this book provides insight into this exciting portfolio strategy. The author demystifies and uncovers the alternative asset class; educates and entertains everyday investors with colorful analogies and easy-to-understand methodologies; identifies useful portfolio strategies, tools and techniques in alternative investing. Following the worst global financial crisis, volatility and a low interest rate environment remain major concerns for investors. Clifford Jack combines the art of analogy and the science of methodology to help investors seek out ideas on building a portfolio. He digs deep to uncover and help simplify the alternative asset class. This timely and insightful read will help everyday investors gain insight into alternative investing.
Foreword x Chapter One: What Goes Up... 1
Chapter Two: The Modern Portfolio Problem 9
The Long and Winding Road: Preparing for the Ride 11
Employers Stall Out: Finding a New Map to Your Financial Future 14
From the Alt Vault: Valuable Takeaways from Chapter Two 18
Chapter Three: A Volatile Reality 19
Motion Sickness: Markets Are Increasingly Cyclical 20
Investor Shock: When Fear Leads to Missed Opportunities 25
New Prescription: Rethink Buy-and-Hold 27
Is It Time to See a Specialist? The Role of Proper Diversification. 28
Radical Idea: Do Something Different 29
From the Alt Vault: Valuable Takeaways from Chapter Three 29
Chapter Four: It’s a Smaller World After All 31
Booster Shot: Globalization Begins 33
Immune System Breakdown: Volatility Reaches Fever Pitch 35
Modern Medicine: Combating Home Country Bias 36
Second Opinion: The Best Advisors Seek the Counsel of Their Peers 38
Fatal Mistake: Do Nothing 40
From the Alt Vault: Valuable Takeaways from Chapter Four 40
Chapter Five: Disappearing Diversification 43
Sugary Sweet: Learning Self-Control 45
Similar Taste: The Rise of Correlation 46
Proper Diversification: A Well-Balanced Diet 51
Thirst for Diversification: Develop an All-Weather Strategy 51
From the Alt Vault: Valuable Takeaways from Chapter Five 53
Chapter Six: Exploring the Alternative Universe 55
Flight Plan: Collaborate to Win 56
Down to Earth: What It Means for the Average Investor 60
Alternative Investments: No Longer So Alien 62
From the Alt Vault: Valuable Takeaways from Chapter Six 65
Chapter Seven: Play the Percentages 67
Risk Mitigation: Eye on the Ball 68
Loss Aversion: Play It Safe 69
Hall of Fame: Unparalleled Returns 71
From the Alt Vault: Valuable Takeaways from Chapter Seven 75
Chapter Eight: Beta Blockers 77
The Prescription: Bringing Balance 78
Better Beta: Reduce Stress 81
Clinical Trial: Safe for Public Use? 83
Risk Parity 86
From the Alt Vault: Valuable Takeaways from Chapter Eight 87
Chapter Nine: Think Outside the Style Box 89
Boxing Out: A Defensive Strategy 90
Xs and Os: Running a New Play 93
Driving the Lane: The Importance of
(Timely and Consistent) Yield 95
From the Alt Vault: Valuable Takeaways from Chapter Nine 97
Chapter Ten: The Scouting Report 99
Due Diligence: A Fundamental Layup 101
Size and Reach: Is Bigger Better? 102
Team Performance: Stars vs. Cellars 103
Preparation: The REIT Way to Do It 103
Expensive Egos: Managing the Managers 104
From the Alt Vault: Valuable Takeaways from Chapter Ten 105
Chapter Eleven: Survival of the Fittest 107
Hedge Funds: Asset Hunters and Gatherers and More 109
Alternative Investments: Global Migration Patterns 111
From the Alt Vault: Valuable Takeaways from Chapter Eleven 113
Chapter Twelve: Fast and Furious 115
Post-Modern Portfolios: Revving the Engine 117
Getting Tactical: Rotate the Tires 118
Alternative Investments: Riding an Annuity Chassis 120
Portfolio Optimization: Balancing Risk and Return 122
Portfolio Overlay: Understanding the Diagnostics 122
From the Alt Vault: Valuable Takeaways from Chapter Twelve 123
Chapter Thirteen: How Leverage Works 125
The Mortgage Industry: Strawberry Fields Forever 127
130/30 Funds: Short But Growing Longer 128
Leverage: Note the Danger and Look Down 129
From the Alt Vault: Valuable Takeaways from Chapter Thirteen 131
Chapter Fourteen: Over the Hedge 133
Hedge Funds 135
Partnerships. 139
Liquidity and Alternatives 141
From the Alt Vault: Valuable Takeaways from Chapter Fourteen 143
Chapter Fifteen: Strategy and Execution 145
Relative Value 149
Event-Driven 151
Equity L/S 152
Global Macro 153
Multi-Strategy 155
From the Alt Vault: Valuable Takeaways from Chapter Fifteen 155
Chapter Sixteen: Completing the Picture 157
So What Now? 159
10 Important Points to Remember 159
Glossary 163
Index 173