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Smart Portfolios: A practical guide to building and maintaining intelligent investment portfolios
Smart Portfolios is about building and maintaining smart investment portfolios. At its heart are the three key questions every investor needs to answer: 1. What to invest in. 2. How much to invest. 3. When to make changes to a portfolio. Author Robert Carver addresses these three areas by providing a single integrated approach to portfolio management. He shows how to follow a step-by-step process to build a multi-asset investment portfolio, and how to rebalance the portfolio efficiently. He covers both investment in collective funds like ETFs, and also direct investment in individual equities. Important features include: -- Why forecasting future returns is so difficult, and how to account for uncertainty when making investment decisions. -- How to accurately calculate the true costs of an investment, including costs that you may not even be aware of. -- How to select the best ETF for each asset class. -- How to compare the costs and other features of different ETFs. -- How to select individual shares. -- Calculating the number of shares needed for adequate diversification. -- How to use systematic forecasting algorithms to adjust portfolio allocations. -- How to cut trading costs through smart rebalancing strategies and execution tactics. Robert Carver also explains how to blend assets with different levels of risk, and how to construct portfolios that suit the level of risk that the investor can cope with. Smart Portfolios is detailed, comprehensive, and full of practical methods, rules of thumb and techniques, all fully explained with examples. It is intended for professional investors worldwide, including financial advisors, private bankers, wealth managers and institutional funds; as well as experienced private investors.
546 pages, Hardcover
Published September 18, 2017
47 people are currently reading
278 people want to read
About the author
Robert Carver
4 books86 followersRobert Carver is an independent systematic futures trader and investor, writer, and research consultant. He is the author of “Systematic Trading: A unique new method for designing trading and investing systems" (Harriman House, 2015), and "Smart Portfolios: A practical guide to building and maintaining intelligent investment portfolios" (Harriman House, September 2017).
Until 2013 Robert worked for AHL, a large systematic hedge fund, and part of the Man Group. He was responsible for the creation of AHL's fundamental global macro strategy, and then managed the funds multi billion dollar fixed income portfolio. Prior to that Robert worked as a research manager for CEPR, an economics think tank, and traded exotic derivatives for Barclays investment bank. He spent his early career in the Middle East.
Robert has a Bachelors degree in Economics from the University of Manchester, and a Masters degree, also in Economics, from Birkbeck College, University of London.
Robert trades and invests with his own money using the methods you can find in his books.
Until 2013 Robert worked for AHL, a large systematic hedge fund, and part of the Man Group. He was responsible for the creation of AHL's fundamental global macro strategy, and then managed the funds multi billion dollar fixed income portfolio. Prior to that Robert worked as a research manager for CEPR, an economics think tank, and traded exotic derivatives for Barclays investment bank. He spent his early career in the Middle East.
Robert has a Bachelors degree in Economics from the University of Manchester, and a Masters degree, also in Economics, from Birkbeck College, University of London.
Robert trades and invests with his own money using the methods you can find in his books.
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Displaying 1 - 6 of 6 reviews
June 18, 2019
Very Technical
June 22, 2024
In short, if you manage less than $10 million, then you may skip this book. Instead, google what an all-weather portfolio is. Buy and hold it, rebalancing as needed.
To read this book and put its concepts into practice, you will need to invest a considerable amount of time and effort. In your case, it may not pay off. You may still want to read Part Four, devoted to portfolio rebalancing.
However, if you manage a substantial amount of money, this book is a piece of gold. It offers exceptionally reasonable and practical ideas for constructing an investment portfolio. Furthermore, I have not seen such great portfolio-building insights in any of the dozens of financial books I have read.
Unfortunately, the book has significant shortcomings. While the author is an outstanding financial thinker, he is not a great teacher or writer.
First and foremost, before reading this book, you should have a thorough understanding of statistics, including not only normal distribution but also bootstrap. You need to be familiar with the normal distribution's limitations in finance. It is crucial to understand why using bootstrap simulations is preferable to relying on Student's t-distribution tables for obtaining confidence intervals for the mean value and other statistics.
Without a solid grasp of the statistical concepts mentioned above, comprehending Part One will be challenging. Furthermore, you may not fully appreciate the wisdom of the insights presented by the author in Parts 2 and 3 of the book.
Unfortunately, Robert Carver did not take the time to explain the fundamentals of statistics to his readers. While the book includes Appendix C, which addresses technical issues, it proves inadequate. Before diving into this book, you could work through textbooks for a solid understanding of statistics, including the bootstrap approach.
I highly recommend getting your hands dirty applying bootstrap methods to financial data. While you can do it in Excel, utilizing Python or R is more convenient. It is highly beneficial for aspiring portfolio managers to verify firsthand that investment return estimates are unstable and unreliable. It underscores the rationale behind assuming equal risk-adjusted returns for all assets when constructing an investment portfolio.
Once you've looked at the estimates of investment returns, turn your attention to the estimates of the correlation between stocks and bonds. By examining the data, you'll notice that these estimates are the same unstable as investment return estimates. This realization should prompt you to completely discard the classic portfolio optimization theory once and for all.
In Part 4 of the book, the author suggests, among other things, rebalancing your portfolio if there are significant changes in your estimates of the correlation between assets. However, this approach doesn't make sense when considering the correlation between stocks and bonds. This correlation tends to fluctuate wildly. During crises, it often approaches 1, making rebalancing strategies impractical.
In addition to demanding a solid grasp of statistics from its readers, this book is quite bloated. Be prepared to feel drowsy while reading it. Nonetheless, I'm pleased that I persevered and completed it. Parts 2, 3, and 4 present numerous unique and intelligent ideas for constructing an investment portfolio. The author's methodology will benefit individuals who manage substantial sums of money.
To read this book and put its concepts into practice, you will need to invest a considerable amount of time and effort. In your case, it may not pay off. You may still want to read Part Four, devoted to portfolio rebalancing.
However, if you manage a substantial amount of money, this book is a piece of gold. It offers exceptionally reasonable and practical ideas for constructing an investment portfolio. Furthermore, I have not seen such great portfolio-building insights in any of the dozens of financial books I have read.
Unfortunately, the book has significant shortcomings. While the author is an outstanding financial thinker, he is not a great teacher or writer.
First and foremost, before reading this book, you should have a thorough understanding of statistics, including not only normal distribution but also bootstrap. You need to be familiar with the normal distribution's limitations in finance. It is crucial to understand why using bootstrap simulations is preferable to relying on Student's t-distribution tables for obtaining confidence intervals for the mean value and other statistics.
Without a solid grasp of the statistical concepts mentioned above, comprehending Part One will be challenging. Furthermore, you may not fully appreciate the wisdom of the insights presented by the author in Parts 2 and 3 of the book.
Unfortunately, Robert Carver did not take the time to explain the fundamentals of statistics to his readers. While the book includes Appendix C, which addresses technical issues, it proves inadequate. Before diving into this book, you could work through textbooks for a solid understanding of statistics, including the bootstrap approach.
I highly recommend getting your hands dirty applying bootstrap methods to financial data. While you can do it in Excel, utilizing Python or R is more convenient. It is highly beneficial for aspiring portfolio managers to verify firsthand that investment return estimates are unstable and unreliable. It underscores the rationale behind assuming equal risk-adjusted returns for all assets when constructing an investment portfolio.
Once you've looked at the estimates of investment returns, turn your attention to the estimates of the correlation between stocks and bonds. By examining the data, you'll notice that these estimates are the same unstable as investment return estimates. This realization should prompt you to completely discard the classic portfolio optimization theory once and for all.
In Part 4 of the book, the author suggests, among other things, rebalancing your portfolio if there are significant changes in your estimates of the correlation between assets. However, this approach doesn't make sense when considering the correlation between stocks and bonds. This correlation tends to fluctuate wildly. During crises, it often approaches 1, making rebalancing strategies impractical.
In addition to demanding a solid grasp of statistics from its readers, this book is quite bloated. Be prepared to feel drowsy while reading it. Nonetheless, I'm pleased that I persevered and completed it. Parts 2, 3, and 4 present numerous unique and intelligent ideas for constructing an investment portfolio. The author's methodology will benefit individuals who manage substantial sums of money.
November 8, 2023
The returns and Sharpe ratio of bonds is absolutely NOT the same as equities :-|
November 16, 2025
Actionable portfolio, a step up technically and more for the advanced investor who is already familiar with Bogle and William Bernstein.
November 14, 2020
- I like that the book is practical
- Not every thing discussed in the book is useful for a small investor like myself, but I was still curious to learn about them
- Market cap weighting might be not the best approach
- Not every thing discussed in the book is useful for a small investor like myself, but I was still curious to learn about them
- Market cap weighting might be not the best approach
August 22, 2020
Insightful and practical!
Data backed and empirical simplification on portfolio construction and optimization - tops down approach to construct asset classes first, follow by industries sector/countries/... and more importantly, assign equal risk weight (not coach weight) to each of these boxes, and finally, propose weight adjustment based on momentum assets past SR...
Data backed and empirical simplification on portfolio construction and optimization - tops down approach to construct asset classes first, follow by industries sector/countries/... and more importantly, assign equal risk weight (not coach weight) to each of these boxes, and finally, propose weight adjustment based on momentum assets past SR...
Displaying 1 - 6 of 6 reviews