The Alternative Answer - The Nontraditional Investments That Drive the World's Best Performing Portfolios

CHAPTER 9

The Big Picture

If you can look into the seeds of time,

And say which grain will grow and which will not,

Speak then to me . . .

       —BANQUO, Macbeth, ACT I, SCENE 3

Don’t you hate it when you’re looking over a too-huge menu, ask the waiter for recommendations, and he helpfully replies, “Everything here is good”?

We’re going to try to be a bit more constructive. The previous four chapters suggested strategies for the main four investment jobs, an à la carte approach. Here we’ll step it up a notch and talk about combining investments into a lovely, complete dinner—a panoramic, risk-tolerant portfolio.

As you know, the thinking about portfolio construction has evolved very far from the old 60/40 approach. The big advance was the endowment ...