The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk Paperback – Illustrated, August 19, 2017

Despite being written decades ago, the Intelligent Asset Allocator is an interesting read, and remains largely relevant. One must keep in mind that it is written just before the tech bubble crash. The book goes farther into the math than most investing books that I've read, and though I have some minor disagreements, the book is a trove of valuable information. I would highly recommend it to those who enjoy learning about personal finance.

The Intelligent Asset Allocator sits right next to 'Stocks for the Long Run' and 'The Intelligent Investor' on my bookshelf; it's a classic.I enjoy thinking about asset allocation and how to best structure a portfolio. No matter what studies you may trust the most, asset allocation is clearly a major driver of portfolio returns. This book invites you to deconstruct your assumptions and build them back up again. I would have liked a book ten times as long, but then I really enjoy seeing all the intricacies. Even so, there is a lot hinted at in these pages that gives you further directions to explore. Even if you are familiar with diversification, various asset classes, portfolio theory and the reasons for indexing, there is a lot of value here. I will admit the book is growing somewhat dated with respect to the time frame it discusses, but the book loses nothing in relevance.I am still building assets, and because this book referenced both standard and aggressive growth portfolios (I employ a portfolio very similar to the 'Madonna' Portfolio he mentions, with a couple key differences), I knew I was on the same trail as the author, which was incredibly gratifying for me. For those with different backgrounds, the insights you find relevant may differ.I will say the book would benefit from a greater discussion of various portfolios. How important is it to mimic the market (or rather, what is the risk associated with failing to look like the market, which is true to some degree of every portfolio?) What is the role of TIPS in a portfolio (or rather, when does Inflation become a central risk? I maintain that you only need them in retirement, but am eager to hear different opinions.) How much risk should you take with the credit portion of your portfolio (I use intermediate term treasuries myself - covariance vs equities is just too superior not to, even with the risk of rising rates. Again, I like to hear other opinions.)With reference to portfolios I've read about: the 'Gone Fishing Portfolio' was also amazingly comprehensive, if not as focussed on portfolio building as the IAA, and the portfolio it proposes is pretty solid. Swenson's books are very good, and his suggested portfolio is top notch, if history is any judge. Swedroe suggests a pretty bullet-proof portfolio, so even though returns won't blow you out of the water, they should be solid, and the ride should be serene (which can be very important in a retirement portfolio, as lack of volatility both increases SAFEMAX and decreases the odds of running out of money early... i.e. the trade-off for lower returns can yield a higher cash flow.) All of these authors are worth the read.

This book was written just prior to the 2000 dot-com collapse. The fact that the author throughout warns that all the traditional signs pointed to trouble and that it wasn't "different this time" enhances his credibility considerably.This book advises self-directed index-fund investing. (ETFs get short shrift.)- The author advises in favor of an equity tilt in order to get good returns but it warns repeatedly about the risk of doing so.- Diversification is shown to reduce risk and, paradoxically, to enhance returns.- Active management is shown to be worthless in the long term and the majority of funds, advisors and brokers are shown to be predatory in all timeframes.In these aspects, Bernstein and Swensen ("Unconventional Success", recommended) are much the same.There are several points of departure:1. Bernstein points to statistics that give evidence of market momentum2. Bernstein favors small cap and value, both domestic and foreign, both equity and debtThese are small points and readers can come to their own conclusions but in the latter case, his thesis leads him to recomment quite a lot of securities in a portfolio, which seems cumbersome to manage for anyone who is not constantly engaged in that activity.The major point of departure from Swensen is in the area of rebalancing. Both favor it but Sensen seems to advocate near-real-time rebalancing in tax-deferred accounts, whereas Bernstein points to momentum and advises annual rebalancing.Both advise against frequent rebalancing in taxable accounts because of the tax penalty. (Swensen is more precise when he says "cut you losers but let your winners run" but that does seem to run contrary to the buy-low-sell-high principle underlying rebalancing.)Conclusion: good book; an easy read; recommended. Just a bit anachronistic given that it was written before the great dot-com crash and because he constantly refers to "modems" which are certainly no longer the technology of choice.

I like how this book emphasizes the importance of long-term trading. There's some good information here that you keep and use for years as this is for the person who can persevere through the market. Good book!