The rewards of carefully chosen alternative investments can be
great. But many investors don't know enough about unfamiliar
investments to make wise choices. For that reason, financial
advisers Larry Swedroe and Jared Kizer designed this book to bring
investors up to speed on the twenty most popular alternative
investments:
Real estate, Inflation-protected securities, Commodities,
International equities, Fixed annuities, Stable-value funds,
High-yield (junk) bonds, Private equity (venture capital), Covered
calls, Socially responsible mutual funds, Precious metals equities,
Preferred stocks, Convertible bonds, Emerging market bonds, Hedge
funds, Leveraged buyouts, Variable annuities, Equity-indexed
annuities, Structured investment products, Leveraged funds
The authors describe how the investments work, the pros and cons of
each, which to consider, which to avoid, and how to get started.
Swedroe and Kizer evaluate each investment in terms of:
* Expected returns
* Volatility
* Distribution of returns
* Diversification potential
* Fees
* Trading and operating expenses
* Liquidity
* Tax efficiency
* Account location
* Role in an asset-allocation program
Any investor who is considering or just curious about investment
opportunities outside the traditional world of stocks, bonds, and
bank certificates of deposit would be well-advised to read this
book.
Autorentext
Larry E. Swedroe is a principal and the director of research for Buckingham Asset Management, LLC (www.bamservices.com). He is the author of several books, including Wise Investing Made Simple and The Only Guide to a Winning Investment Strategy You'll Ever Need, and coauthor of The Only Guide to a Winning Bond Strategy You'll Ever Need. Swedroe received his MBA in finance from New York University. He lives in St. Louis.
Zusammenfassung
The rewards of carefully chosen alternative investments can be great. But many investors don't know enough about unfamiliar investments to make wise choices. For that reason, financial advisers Larry Swedroe and Jared Kizer designed this book to bring investors up to speed on the twenty most popular alternative investments:
Real estate, Inflation-protected securities, Commodities, International equities, Fixed annuities, Stable-value funds, High-yield (junk) bonds, Private equity (venture capital), Covered calls, Socially responsible mutual funds, Precious metals equities, Preferred stocks, Convertible bonds, Emerging market bonds, Hedge funds, Leveraged buyouts, Variable annuities, Equity-indexed annuities, Structured investment products, Leveraged funds
The authors describe how the investments work, the pros and cons of each, which to consider, which to avoid, and how to get started. Swedroe and Kizer evaluate each investment in terms of:
- Expected returns
- Volatility
- Distribution of returns
- Diversification potential
- Fees
- Trading and operating expenses
- Liquidity
- Tax efficiency
- Account location
- Role in an asset-allocation program
Any investor who is considering or just curious about investment opportunities outside the traditional world of stocks, bonds, and bank certificates of deposit would be well-advised to read this book.
Inhalt
Acknowledgments.
Introduction.
A Travel Guide to Alternative Investments.
Modern Portfolio Theory.
The Good, the Flawed, the Bad, and the Ugly.
PART 1 The Good.
Chapter 1 Real Estate.
Historical Returns and Risk: U.S. Real Estate, U.S. Equities, and International Equities.
The Diversification Benefits of REITs.
Benefits of Diversification: Sample Portfolios.
Asset Location and Real Estate.
Recommended Investment Vehicles.
International Real Estate.
DRW, RWX, and WPS.
DFA International Real Estate Securities Portfolio.
Tax Considerations.
The Wrap-Up on International REITs.
Your Home and the Asset Allocation Decision.
Wrap-Up on the Home as an Investment.
Wrap-Up on Direct Ownership.
Summary.
Chapter 2 Inflation-Protected Securities.
Real or Nominal Return Bonds: Which Are Riskier?
TIPS: Doing the Math.
Correlations with Equities and Inflation.
Inflation, Price, and Interest Rate Risk.
Inflation Risk.
Price Risk.
Interest Rate Risk.
TIPS: Pros and Cons.
Pros.
Cons.
Allocating Between Real and Nominal Return.
Fixed-Income Assets.
A Shifting Allocation Approach.
Developing a Strategy.
Implementation.
A Shifting Maturity Strategy.
I Bonds.
Summary.
Chapter 3 Commodities.
Correlation with Stocks, Bonds, and Inflation.
Event Risk.
A Risk-Reduction Tool.
Portfolio Efficiency.
Gaining Exposure to Commodities.
Mutual Funds: QRAAX and PCRIX.
Commodity-Related ETFs.
Commodity-Related ETNs.
CTAs.
The Argument Against Investing in Commodity Producers.
The Equities of Oil Producers.
Implementation.
Summary.
Chapter 4 International Equities.
|Emerging Markets Equities.
Correlations.
Sample Portfolios.
The Risks of Investing in Emerging Markets.
Small-Cap and Value Stocks.
Recommended Vehicles.
Wrap-Up: Emerging Markets.
International Small-Cap Stocks.
Sample Portfolios.
Recommended Vehicles.
Summary.
Chapter 5 Fixed Annuities.
How Long Do Payments Continue?
Determinants of Payment Size.
The Benefits of Annuitization.
Mortality Credits Make It Possible.
When Annuities Can Be the Right Choice.
Evidence from Academia.
When to Purchase a Fixed Annuity.
Inflation-Indexed Immediate Annuities.
Summary.
Chapter 6 Stable-Value Funds.
Unique Risk and Return Characteristics.
Investment Portfolios.
Risks.
Costs.
Restrictions.
Returns Change Slowly Over Time.
Cash Flows Can Affect Returns.
Summary.
PART 2 The Flawed.
Chapter 7 High-Yield (Junk) Bonds.
Explaining the Low Correlation.
Is Higher Yield Worth Higher Risk?
The Importance of Equity Risk.
Hybrid Securities and Asset Allocation.
Evidence Supported by Theory.
Do High-Yield Bonds Have a Role?
Illiquid Securities.
Other Negative Characteristics.
Distribution of Returns Matters.
High-Yield Bonds and Efficient Frontier Models.
Inflation Risk.
Asset Location.
The Need for Diversification.
The Historical Evidence.
Vanguard High-Yield Corporate Fund.
More Efficient Alternatives.
Summary.
Chapter 8 Private Equity (Venture Capital).
Origins.
The Attraction.
The Historical Evidence.
Characteristics of Private Equity Returns.
Venture Capital Versus Publicly Traded Securities.
Inefficient Diversification.
Bias in the Data.
Perception Versus Reality.
Private Equity's Role in a Portfolio.
Nonmonetary Explanations for Private Equity Investing.
Summary.
Chapter 9 Covered Calls.
Taxes Matter.
Transactions Costs.
An Alternative Strategy.