Asset Rotation : The Demise of Modern Portfolio Theory and the Birth of an Investment Renaissance
[Book Description]
An all-weather, tactical approach to asset management utilizing Exchange Traded Funds (ETFs)
In Asset Rotation, portfolio management pioneer Matthew P. Erickson demonstrates a time-tested approach to asset management that has worked throughout the history of capital markets, in good times and bad. Providing investors with strong participation in rising markets, but more importantly with a discipline to reduce participation in prolonged declines. Over time this revolutionary approach has yielded superior returns, with significantly reduced levels of risk; providing the engine for true, long-term sustainable growth.
The investment world as we know it has changed, and the paradigm has shifted. What has worked in the past may no longer work in the future. No longer may bonds be regarded as a safe haven asset class, as for the first time in generations, investors in fixed income face losses as interest rates rise from historical all-time lows. For those adhering to a conventional Modern Portfolio Theory based investment approach to asset management, what was once regarded as safe and stable, may very well soon become our greatest impediment.
Asset Rotation provides investors with a practical solution for today's real world problems. This tactical approach to asset management provides us with concrete proof that there is indeed a better way.
We are standing on the precipice of an Investment Renaissance. What was previously impossible, is now possible. Find out how. * Presents an easy-to-understand price momentum-based approach to investing * Illustrates the benefits of asset rotation * Offers a systematic approach for securing a sound financial future * Provides further insights as to how to customize your own asset rotation portfolio
Matthew Erickson gives investors a hands-on resource for how to navigate an increasingly difficult investment landscape, by providing them with keen insights into the most rapidly growing segment of the investment markets.
[Table of Contents]
Acknowledgments xi
Prologue: David & Goliath xiii
Preface: We Stand on the Precipice of an xv
Investment Renaissance
Chapter 1 Taking the 30,000-Foot View 1 (12)
Where We Are Today The Individual Investor 1 (2)
Ockham's Razor 3 (3)
Our Current Economic Landscape 6 (5)
The Bottom Line 11 (2)
Chapter 2 When the Paradigm Shifts 13 (22)
Why What Worked in the Past May No Longer 15 (4)
Work in the Future A Primer on Modern
Portfolio Theory
The Treasury Run 19 (10)
Losing Money in Bonds 29 (3)
The Bottom Line 32 (3)
Chapter 3 Shooting Stars 35 (20)
The Performance Realities of Mutual Fund 38 (15)
Ownership The Persistence of Manager
Performance
The Bottom Line 53 (2)
Chapter 4 Beyond the Stars 55 (24)
Suggestions for Investment Selection Criteria 58 (6)
The Cost of Investing
Identifying Risk 64 (9)
Assessing the Investment Environment 73 (3)
The Bottom Line 76 (3)
Chapter 5 The Landscape Has Changed 79 (18)
The Proliferation of the ETF The ETF: What Is 80 (3)
It?
A Brief History 83 (3)
The Use of ETFs in a Portfolio 86 (8)
The Bottom Line 94 (3)
Chapter 6 Challenging Convention 97 (26)
An Introduction to Asset Rotation A 106 (2)
Time-Tested Approach
The 2000s 108 (2)
The 1990s 110 (2)
The 1980s 112 (1)
The 1970s 113 (1)
The 1960s 114 (1)
The 1950s 115 (2)
The 1940s 117 (1)
The Great Depression 118 (1)
From the Great Depression to Today 119 (2)
The Bottom Line 121 (2)
Chapter 7 Building a Better Mousetrap 123 (24)
Advanced Asset Rotation Building a Better 124 (10)
Mousetrap
The 1990s 134 (2)
The 2000s 136 (2)
From 2010 to 2012 138 (2)
23 Years: 1999-2012 140 (1)
Going Toe to Toe with the Best 141 (2)
The Bottom Line 143 (4)
Chapter 8 Choose Your Own Adventure 147 (24)
Building Your Own Asset Rotation Portfolio 148 (1)
Choose Your Own Adventure
Additional Factors to Consider: Eligible Risk 149 (10)
Assets
Additional Factors to Consider: Eligible 159 (4)
Flight to Safety/Fixed-Income Assets
Additional Factors to Consider: Criteria for 163 (2)
Investment Selection
Creating a Scoring System 165 (2)
Required Due Diligence 167 (1)
The Bottom Line 168 (3)
Chapter 9 The Anatomy of Change 171 (18)
Setting Appropriate Expectations Benchmarking 172 (3)
Success
The Four Seasons 175 (1)
When Equity Markets Rise 176 (1)
When Equity Markets Fall 177 (3)
When Equity Markets Move Sideways 180 (3)
When Equity Markets Move Sideways with 183 (3)
Volatility
The Bottom Line 186 (3)
Chapter 10 Letting Go of Your Crutch 189 (14)
Integrating Asset Rotation into Your Overall 190 (1)
Approach Citius, Altius, Fortius
Asset Rotation as a Core Approach 191 (4)
Baby Steps 195 (1)
Supplementing Either Equities or Fixed Income 195 (3)
Adopting a Core/Satellite Approach 198 (2)
The Bottom Line 200 (3)
Chapter 11 The Road Ahead 203 (4)
Real-World Solutions for a Changing Landscape 205 (2)
The Bottom Line
About the Author 207 (2)
Index 209
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