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Guide to Investment Strategy
Description
The EconomistGuide to Investment Strategy explained the fundamentals of investmentrisk, how to put together "keep-it-simple" investmentstrategies, and the need to guard against our own behavior leading todreadful investment mistakes. The global crisis that erupted in 2008exposed the flaws in many more complicated investment strategies.
Thesecond edition starts with a new section on financial fraud and howinvestors can help to protect themselves against this "heartyperennial." It also includes a new section on risk profilingand discusses the role of risk tolerance questionnaires. In Chapter 3data are provided pointing to underperformance of equities between1978 and 2008. Against this background, there is a new Chapter4—"Which should we do: buy-and-hold or time markets?"Chapter 5, which discusses the design of short-term and long-termstrategies, includes a new section "How safe is cash?" andthe discussion of bond ladders is extended to reflect issues of bondselection in the light of corporate credit risk and the financialdifficulties of some US municipal authorities.
Part2 has been updated extensively to reflect developments in the pastfour years and the impact of the financial crisis on creditinstruments, hedge funds, private equity, and real estate.Thebook concludes with a new chapter on investing in art andcollectibles. It explores the argument that art prices "floataimlessly," discusses financial investment in art, and providessome reasons for expecting that a portfolio of art might perform wellin the future.
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