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An excellent summary of the ‘alternatives’ asset class. I heard the author on the Meb Fabre podcast (which I also highly recommend). The only problem is that for a U.K. based investor it is difficult and in some cases simply not possible to invest in some of the strategies I.e. where can I find a cat bond fund in the U.K.? Most of the example funds are US based / only open to US investors but I agree with the premise of the book about the death of 60/40 due to the high valuation of the bond market, etc.
This book is a great illustration of the complexity of finding true alternative investment options. The book does say it's for professionals and he's right. This really only becomes relevant to those with deep pockets - £500k plus I would say how can truly take advantage of the value of this book. This is because the cost of investing with smaller capital would be too expensive. Good rrad but unlikely to be tootlsy relevant to nornal retail investors.
This book began with a rah-rah couple of chapters saying what everyone else is saying: the stocks are overvalued, bonds yield nothing and have rising interest rate risk. Following this section was a much more dry series of chapters serially going through alternative asset classes. Finally the book concludes with various ways that these assets could be incorporated into future portfolio construction,
Some of my struggles with this book were the unreferenced or claims of superior performance for various alternative assets over unspecified time periods. The book was very light on references and specifics to back up claims, and left me wondering if he was cherry picking performances based on favorable intervals (almost universal among financial writers).
I also was looking at this book from a self-managed individual investor viewpoint. The book seems to be principally aimed at money managers. When I researched many of the recommended funds for various alternative assets, most of them would only deal with registered investment advisors (RIAs) or institutions, often with minimums in the seven figure range. So the information might be useful for RIAs that can pool assets from a number of clients, but is unhelpful for individual self-managed investors with moderate assets.
Overall, for the individual investor, this book was of modest value, and was insufficiently referenced for me to wholly trust the conclusions.
Phil has a gift for presenting complex ideas in a straightforward and concise manner. I started working in financial services in the early 90s and as I look back, it's hard to believe how much things have changed! It was the heyday of the 60/40 portfolio. This book is greatly needed to fill a gap to help inform investors about alternatives and their role in a well-constructed portfolio.
I can't argue with the premise (the bull market in bonds is over, stocks are over valued), but the execution is not for individual investors, unless they have many millions to establish an asset allocation of 80% traditional investments so they can devote 20% to alternatives. The title should really reflect that. The application of the different types of alternative investments is for money managers that can either get a pass on the high minimums or have clients that can drop a $500,000 to a million on an alternative investments.
That being said, this is an eye opener - the field of alternatives has expanded quite a bit; however, the returns remain to be seen (since they have really not been there in the past, per Morningstar). This is not an easy subject to read about but Huber does his best to make it digestible. I appreciated the format and the summaries at the end of the chapters. I'd recommend this for any CFP, CAIA, CFA or other types of money managers.
For those that can't play at the no-limit table I found only 3 tickers that were relevant: PAVE, GLIFX, and GUNR. Just to save some of you the time. Now, as far as real estate, farmland and collectibles go you can research those via Google. Be prepared for high fees and illiquidity (which Huber clearly states at the onset, and he makes a good case for accepting that).
I was amazed at how many alternatives are there outside of the traditional equity and bonds markets. The fact that there is such a spectrum of alternatives with comparable returns and lower correlation to the equity market is something that is required in today’s dilemma where correlation between asset classes only goes up. Lots of options for a accredited investor but close enough for the rest with the democratization through technology.
The book doesn’t tell you what to choose but it opens the door for you to make your own research knowing what options are available. If you want to widen your investment options, this book is for you.
Phil really brings to the forefront that there is more to allocation than stocks and bonds and how these are managed takes a lot of expertise. Great book, would definitely recommend it to anyone interested in how to allocate their portfolio.
Having read all the investment classics this book is not one of them. If you are a registered investment advisor, a client of a register investment advisor, or accredited investor maybe it's a good read. The first three chapters are strong, the last one, and appendix three are good. The middle of the book has lacks references, purchased after hearing a post cast on, "The Compound", before any reviews. Lesson my learned!