Beyond Diversification: What Every Investor Needs to Know About Asset Allocation

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Equilibrium and Something About Quack Remedies Sold on the Internet

The expected return for the market portfolio should be a function of the level of interest rates. When rates are high, investors require higher returns on all tradable assets.

—JPP

A note to readers: I completed this book shortly before the Covid crisis. No model can predict what might come next in the evolution of the pandemic from a public health perspective. If we take a long-term view, I don’t expect the estimates provided in this and other sections of the book to be too different from those that we could construct in the postcrisis environment. Methodologies are simple and transparent. They can easily be updated with more recent data.

FOR MULTI-ASSET INVESTORS, A BASIC ...