Top critical review
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Read "All About Asset Allocation" Instead
on August 1, 2015
Good anecdotal review of why low cost, passive strategies beat the overwhelming majority of active managers, backed up by discussion of academic studies presenting this point. The book's premise would have been more convincing if the author had taken a more broad, data driven view of the various market risk premiums/styles, such as momentum, credit, and duration. The author also arbitrarily excluded the vast majority of the fixed income universe from consideration in portfolio construction (including the benefits of duration and credit exposures in the portfolio) under the pretenses of reducing volatility and a sloppy, static correlation analysis with equity markets, which in my opinion was a major shortcoming. Strong beginning, but I felt like the book trailed off into an overly promotional advertisement of DFA funds toward the conclusion, and no counter-arguments to this approach to portfolio design are addressed. For instance, can DFA funds really be considered passive and what does "passive" even mean? And why is passive desirable, or are the costs of investment management the real issue? The author partially assumed his conclusion. In summary, this is definitely not the only guide to a winning investment strategy you will ever need. I just finished this book as well as All About Asset Allocation by Richard Ferri. While more dense, Ferri's book is a much more practical, data driven guide, and better organized than this book. In fairness to Swedroe, I've learned a lot from reading his views and his columns on ETF.com are excellent, but I was disappointed by this book.