Asset Allocation: Balancing Financial Risk [Hardcover]

Roger C. Gibson (Author)

Book Description

Publication Date: April 1996

This classic resource has been revised and updated to reflect the latest data affecting asset allocation. Noted expert, Roger Gibson, provides a thorough review of the capital market theory behind asset allocation, plus step-by-step guidelines for designing and implementing appropriate investment strategies.

Editorial Reviews

From the Back Cover

Asset Allocation Balancing Financial Risk Third Edition Roger C. Gibson

Winner – Dow Jones Portfolio Management Award

Professional Praise for Roger Gibson’s Classic High-Return, Low-Risk Investing Classic …

"Not long ago most families invested little in stocks, even though they have provided superior returns in the long run. Recently, many of these families have plunged significant portions of their savings into narrow sectors of the market. Roger Gibson presents individual investors (and their investment advisors) with a balanced, professional view of the investment process which will much better serve an individual’s or family’s investment needs."—-Harry M. Markowitz, The "Father" of Modern Portfolio Theory, 1990 Nobel Prize Winner, Economic Sciences

"[Gibson’s book’] should be of enormous benefit to the investor seeking the proper decision-making process. I congratulate [him] for treating the asset allocation subject in such depth and bringing this issue—which is the critical investment issue for all investors—to the forefront. It is the best overall piece of work I’ve seen." —-Gary P. Brinson, CFA, President and Managing Partner, Brinson Partners, Inc. Past Chairman, The Institute of Chartered Financial Analysts

"The author balances a solid, understandable, and logical grasp of investment knowledge with an obvious input of practical experience. If all investment advisors would read and understand this book, clients would be far better off." --Darwin M. Bayston, CFA, President, Bayston Capital Management, Inc. Past President and Chief Executive Officer, The Association for Investment Management Research

Asset Allocation Balancing Financial Risk Third Edition Roger C. Gibson

"Asset allocation empowers the individual investor…"-—Roger C. Gibson
As financial commentators fill the airwaves with warnings and advice, and coworkers gather around computer screens to track hot stocks, investors find it increasingly difficult to stick with proven, orderly investment strategies. But in the updated third edition of his classic Asset Allocation, Roger Gibson reminds us that choosing a sensible, proven asset allocation strategy—concerned more with the optimal mix of investment classes than with today’s hot stock picks—is exactly what investors must do to remain sane and successful...And then he shows us how to do it.
Asset Allocation dispenses with luck, market timing, and other "Buy low, sell high" sleights of hand to outline sensible decisions that all investors can make on their own. Less concerned with how investments perform individually than how they perform as a group, it explains how to assemble a long-term portfolio that will actually outperform its parts—while minimizing overall risks—no matter what the market environment.
This all-in-one template for successful long-term investing includes: An easy-to-follow, risk-adjusted model for striking the best portfolio balance between equity and fixed-income securities Rewards of Multiple-Asset-Class Investing—a new chapter that proves why, over time, diversification is still the only sensible alternative Managing Client Expectations—Guidelines to help clients ignore short-term fears—and hold to long-term investment strategies Classic lessons of modern portfolio theory placed into the framework of today’s tumultuous marketplace Performance tables, charts, figures, and more—completely updated from the best-selling second edition
Overriding principles of successful and low-pressure investing are relatively few, and easy to understand. What becomes difficult is to stick to these principles, remind oneself that both bull and bear markets are historically inevitable, and design a long-term portfolio strategy that—once the day traders and market timers have pulled out to tally their defeats—provides day-to-day peace of mind and lifetime financial security.
Asset Allocation learns from history instead of ignoring it. This updated third edition remains today’s most valuable resource for understanding and applying historically tested asset allocation principles, and designing an investment strategy that shifts the focus from short-term tips and blips to long-term needs and results.

About the Author Roger Gibson, CFA, CFP, is a nationally recognized expert in asset allocations and investment portfolio design. The president of Gibson Capital Management, a leading provider of money management services for high net worth individuals, he was named by both Money and Worth as one of America’s top financial advisors. Gibson is a member of the editorial board of the Journal of Financial Planning and is frequently interviewed by publications including The Wall Street Journal, Forbes, Money, Fortune, The New York Times, and U.S. News and World Report. He is also codirector and founder of the Center for Fiduciary Studies, a research and training organization that operates in association with the Katz Graduate School of Business at the University of Pittsburgh. --This text refers to an out of print or unavailable edition of this title.

About the Author

Roger Gibson, Charted Financial Analyst (CFA) and Certified Financial Planner (CFP) is President of Gibson Capital Management, Ltd. located in Pittsburgh, Pennsylvania. The firm is a Registered Investment Adviser providing money management services for high net worth individuals and institutional clients nationwide. Gibson is internationally recognized as an expert in asset allocation and investment portfolio design. He is a frequent speaker at national educational conferences sponsored by such organizations as the American Law Institute-American Bar Association, The American Institute of Certified Public Accountants, The International Association for Financial Planning, the Institute of Certified Financial Planners, and the National Endowment for Financial Education. He also serves on the Advisory Board and is a regular columnist on asset allocation for the Journal of Retirement Planning and is a member of the Editorial Advisory Board of the Journal of Financial Planning. He is frequently interviewed by financial publications, including The Wall Street Journal, Forbes, Money, Fortune, The New York Times, and U.S. News and World Report. --This text refers to an out of print or unavailable edition of this title.

Product Details

• Hardcover: 262 pages
• Publisher: Irwin Professional Pub; 2 Sub edition (April 1996)
• Language: English
• ISBN-10: 1556237995
• ISBN-13: 978-1556237997
• Product Dimensions: 9 x 6.2 x 1 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 4.2 out of 5 stars  See all reviews (19 customer reviews)
• Amazon Best Sellers Rank: #1,891,736 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

35 of 35 people found the following review helpful:

5.0 out of 5 stars Very important read on diversification., August 19, 2004

By 

TheNextGuy "TheNextGuy" (Brooklyn, NY) - See all my reviews

This review is from: Asset Allocation: Balancing Financial Risk (Hardcover)

There are many ways to look at a portfolio, thus a long-term investment strategy, so there are many ways a book's author can add value to the portfolio-making process. Graham adds it through the analysis of stock-level capital appreciation, Malkiel adds it through the deep understanding of the overall market, Siegel adds it through the analysis of the power of time, Edleson adds it through the analysis of persistent equity acquisition, Bogle adds it through the analysis of portfolio implementation, Bernstein adds it through the analysis of an individual investor's psychological background.

Yet, IMHO, Gibson is the only one who truly adds value to the portfolio-making process through the analysis of the mechanics of high-level asset allocation. Every investor should read this book to understand the portfolio development process in general, and the rewards of multiple-asset-class investing in particular.

Gibson's is the only book I found that very clearly and with due emphasis explains that, contrary to common sense, a portfolio including non-top performers for a period can actually outperform a single top-performer for the same period, and that a portfolio ignoring a worst-performer for a period can actually be penalized and underperform portfolios that intentionally include it. In short, you might not have to time the market and/or always hold only the winners to actually do better than most of the winners themselves, and with less volatility. No other author makes that point as well as Gibson (with Bernstein coming up a somewhat distant second), and no other author makes it a point to consider commodities as a building block of an aggressive portfolio.

The only problem I have with this book is what other reviewers have already mentioned: the book, at times, leaves you yearning (if that's the right word...) for more information. For example, I would like to have seen more examples of model portfolio performance vs. various fixed-income asset allocations ("taming" volatility through the degree of diversification vs. loading up blind on fixed-income), a more thorough discussion of rebalancing (Gibson suggests "once a year", Bernstein tries to ride trends and suggests "once every 2 to 3 years"), a more thorough discussion of market cap and investing style impacts on modeled asset classes (micro-caps, value- oriented indexes, etc.)

Other than that, this book is worth every penny paid for it, and every minute spent studying it.

57 of 61 people found the following review helpful:

5.0 out of 5 stars Good jumping off point., July 15, 2001

By 

Gerard Guillemette (Los Angeles, CA USA) - See all my reviews

Amazon Verified Purchase

This review is from: Asset Allocation: Balancing Financial Risk (Hardcover)

I found this books very useful. I've been trying to find an intelligent investing style. Read things like "The Intelligent Investor" by Graham and "A Random Walk Down Wall St." by Malkiel and found them dry and somewhat inaccessible. I much prefered Evans and Malkiel's "Earn More (Sleep Better) : The Index Fund Solution" (cheesy title) and Bernstein's "The Intelligent Asset Allocator". Both small and intelligible books. The only problem is they seemed to state the solution to a problem I didn't know. That's where Gibson's "Asset Allocation" I think fits in. It describes what the problem is when trying to invest well. He makes very good arguments on what you can expect and what you'll have to understand. Things that Berstein and Malkiel go into more depth but Gibson gives you the big picture. I started looking for the solution to a problem and found that the last piece I need was to know what the problem was. Gibson's book reads fast and it is interesting. It's well illustrated and is a great jump off point to all sort of other books.

32 of 33 people found the following review helpful:

3.0 out of 5 stars A Good Intro, But...., July 5, 2001

By 

Will Schrafft (Dover, MA United States) - See all my reviews

This review is from: Asset Allocation: Balancing Financial Risk (Hardcover)

A better title for this book would be "An Introduction to Investments, Practice Management and Asset Allocation". Only about a chapter and a half deals with asset allocation issues; the rest is about the basics of economics and investments, practice management, fact finders, etc.

The text is quite handy in that it covers the basics of all three of these investment areas in a style that is very readable and understandable. If you are a novice to investing or are considering a career (shift) in(to) investments, this book provides a nice overview and is a good starting point. If you are already an investment professional or have your CFA designation, don't bother; you'll find it far too simplistic.