Last updated: 09:17 / Friday, 8 April 2016
Butler, Philbrick and Rodrigo

A New Book Authored by the Executive Team of ReSolve Asset Management: Adaptive Asset Allocation

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A New Book Authored by the Executive Team of ReSolve Asset Management: Adaptive Asset Allocation
  • Butler, Philbrick and Rodrigo argue that true portfolio diversification cannot be achieved by picking a set of securities within a single asset class
  • An optimized portfolio must allow a quick response to changes in asset class risks and relationships, and the flexibility to continually adapt to market changes
  • The portfolio management industry is undergoing a revolution analogous to the shift that occurred after Markowitz introduced his modern portfolio theory in 1967

Adam Butler, Michael Philbrick and Rodrigo Gordilloare the executive team behind ReSolve Asset Management and the authors of the new book, Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times and Bad.

In their new book, Butler, Philbrick and Rodrigo, argue that picking stocks can only get you so far…true portfolio diversification cannot be achieved by picking a set of securities within a single asset class.

Given the current difficult market conditions, the traditional means of portfolio management simply won’t help investors achieve their financial objective. Static stock and bond portfolios, strategic asset allocation, and buy-and-hold might work during certain market regimes, but if they didn’t get the job done over the last 15 years. ReSolve Asset management is expecting 20 more years of the same, investors have to make some real changes.

Adaptive Asset Allocation presents a framework that addresses these major challenges, emphasizing the importance of an agile, globally-diversified portfolio:

  • Scrutinizes the relationship between portfolio volatility and retirement income.
  • Details the historic divergence between economic reality and investor behavior.
  • Demonstrates a model for predicting long-term returns on the basis of current valuations.
  • Examines the difference between Strategic Asset Allocation, Tactical Asset Allocation, and Dynamic Asset Allocation.
  • Adopts an investment framework for stability, growth, and maximum income.

An optimized portfolio must be structured in a way that allows a quick response to changes in asset class risks and relationships, and the flexibility to continually adapt to market changes. To execute such an ambitious strategy, it is essential to have a strong grasp of foundational wealth management concepts, a reliable system of forecasting, and a clear understanding of the merits of individual investment methods.

“The portfolio management industry is undergoing a revolution analogous to the shift that occurred after Markowitz introduced his modern portfolio theory in 1967. Managers who embrace the new methods will increasingly dominate traditional managers, and those who fail to adapt will, inevitably, face extinction,” assert the authors.

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