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Post Modern Investment: Facts and Fallacies of Growing Wealth in a Multi-Asset World

Book Description

Debunking outdated and inaccurate beliefs about investment management and reveals the new realities of the post-modern financial markets

There have been a lot of big changes in the investment world over the past decade, and many long-cherished beliefs about the structures and performance of various investments no longer apply. Unfortunately the news seems not to have reached many thought leaders and investment professionals who persist in trying, and failing, to apply 20th-century thinking to 21st-century portfolio management. Nowhere is this more true than when it comes to the subject of alternative investments. Written by an all-star team of investment management experts, this book debunks common myths and misconceptions about most classes of alternative investments and offers valuable advice on how to develop investment management and asset allocation strategies consistent with the new realities of the ever-changing world of alternative investments.

  • Covers most alternative asset classes, including private equity, real estate, managed futures, hedge funds, commodity indices, and more

  • Debunks long-held assumptions about the structure and performance of various investment classes that continue to dominate the industry

  • Explores the implications for investment managers of the proliferation of international marketable securities and global financial markets

  • Provides an overview of both the micro and the macro aspects of each alternative investment class

Table of Contents

  1. Cover
  2. Title Page
  3. Series Page
  4. Copyright
  5. Dedication
  6. Preface
    1. The Core Concepts in Managing Wealth
    2. Postmodern Investment
    3. How the Chapters Are Structured
    4. As You Begin
  7. Acknowledgments
  8. Chapter 1: Investment Ideas: Evolution or Revolution?
    1. In the Beginning
    2. The Beginning of Information Transparency
    3. New Markets, New Products, and the Evolution of Modern Investment
    4. New Opportunities Create New Risks
    5. The Market Is Not Efficient for Everyone
    6. A Personal View of Modern Investment
    7. What Every Investor Should Know
    8. Myths and Misconceptions of Modern Investment
  9. Chapter 2: Equity and Fixed Income: The Traditional Pair
    1. A Brief Review
    2. Equity and Fixed-Income Styles and Benchmarks
    3. Basic Sources of Risk and Return
    4. Performance: Fact and Fiction
    5. Return and Risk Characteristics
    6. The Myth of Average: Equity and Fixed-Income Return in Extreme Markets
    7. Annual Performance
    8. Performance in 2008
    9. Special Issues: Making Sense Out of Traditional Stock and Bond Indices
    10. A Personal View of Equity and Fixed-Income Analysis
    11. What Every Investor Should Know
    12. Myths and Misconceptions of Equity and Fixed Income
  10. Chapter 3: Hedge Funds: An Absolute Return Answer?
    1. What Are Hedge Funds?
    2. Investing in Hedge Funds
    3. Hedge Fund Styles and Benchmarks
    4. Basic Sources of Return and Risk
    5. Performance: Fact and Fiction
    6. Return and Risk Characteristics
    7. The Myth of Average: Hedge Fund Index Return in Extreme Markets
    8. Hedge Fund Annual Performance
    9. Performance in 2008
    10. Making Sense Out of Hedge Fund Indices
    11. Making Sense Out of Alternative Approaches to Investing in Hedge Funds
    12. A Personal View: Issues in Hedge Fund Investment
    13. What Every Investor Should Know
    14. Myths and Misconceptions of Hedge Funds
  11. Chapter 4: Managed Futures: A Zero-Sum Game?
    1. What Are Managed Futures?
    2. Investing in Managed Futures
    3. Managed Futures Styles and Benchmarks
    4. Basic Sources of Return and Risk
    5. Performance: Fact and Fiction
    6. Return and Risk Characteristics
    7. The Myth of Average: Commodity Trading Advisor Index Return in Extreme Markets
    8. Commodity Trading Advisor Annual Performance
    9. Performance in 2008
    10. Making Sense of Commodity Trading Advisor Performance
    11. Making Sense Out of Alternative Approaches to Investing in Commodity Trading Advisors
    12. Commodity Trading Advisor Investable Indices
    13. A Personal View: Issues in Managed Futures Investment
    14. What Every Investor Should Know
    15. Myths and Misconceptions of Managed Futures
  12. Chapter 5: Commodities: An Ever-Changing Balance
    1. Investing in Commodities
    2. Commodity Styles and Benchmarks
    3. Basic Sources of Return and Risk
    4. Performance: Fact and Fiction
    5. Return and Risk Characteristics
    6. The Myth of Average: Commodity Index Return in Extreme Markets
    7. Commodity Annual Performance
    8. Commodity Subsector Index: Annual Commodity Performance
    9. Performance in 2008
    10. Special Issues in Commodity Investment
    11. Commodities as an Inflation Hedge
    12. Comparison between Direct and Equity-Based Commodity Investment
    13. Comparison between Equity-Based Mutual Fund and Exchange-Traded Fund Commodity Investment
    14. A Personal View: Issues in Commodity Investment
    15. What Every Investor Should Know
    16. Myths and Misconceptions of Commodity Investment
  13. Chapter 6: Private Equity: Its True Value?
    1. Investing in Private Equity
    2. Private Equity Styles and Benchmarks
    3. Basic Sources of Risk and Return
    4. Performance: Fact and Fiction
    5. Return and Risk Characteristics
    6. The Myth of Average: Private Equity Index Return in Extreme Markets
    7. Private Equity Annual Performance
    8. Performance in 2008
    9. Issues in Private Equity Investment
    10. Private Equity Indices
    11. Alternatives to Investment in Private Equity
    12. A Personal View: Issues in Private Equity Investment
    13. What Every Investor Should Know
    14. Myths and Misconceptions of Private Equity
  14. Chapter 7: Real Estate: The New World
    1. Investing in Real Estate
    2. Housing or Residential Real Estate Properties
    3. Private and Public Commercial Real Estate Debt
    4. Real Estate Styles and Benchmarks
    5. Basic Sources of Risk and Return
    6. Performance: Fact and Fiction
    7. Return and Risk Characteristics
    8. The Myth of Average: Real Estate Investment Trust Index Return in Extreme Markets
    9. Real Estate Annual Performance
    10. Performance in 2008
    11. The U.S. Real Estate “Bubble” and the Subprime Mortgage Crisis of 2007 to 2010
    12. Special Issues in Real Estate
    13. A Personal View: Issues in Real Estate Investment
    14. What Every Investor Should Know
    15. Myths and Misconceptions of Real Estate
  15. Chapter 8: Asset Allocation: The Simple Way and the Hard Way
    1. The Why and Wherefore of Multiple Asset Allocation Approaches
    2. Overview and Limitations of the Existing Asset Allocation Process
    3. Asset Allocation in Traditional and Alternative Investments: A Road Map
    4. Return and Risk Attributes and Strategy Allocation
    5. The Myth of Average: Asset Allocation in Extreme Markets
    6. Alternative Asset Allocation Approaches
    7. A Personal View: Issues in Asset Allocation
    8. What Every Investor Should Know
    9. Myths and Misconceptions in Asset Allocation
  16. Chapter 9: Risk Management: An Oxymoron
    1. Risk Management versus Risk Measurement
    2. Measures of Risk
    3. Risk-Adjusted Models
    4. What a Difference a Day, Week, or Month Makes
    5. Qualitative Risk Management
    6. A Personal View: Issues in Risk Management
    7. What Every Investor Should Know
    8. Myths and Misconceptions of Risk Management
  17. Chapter 10: In Conclusion
  18. Bibliography
  19. About the Authors
  20. Index