Portfolio Design -- Contents -- Preface -- Acknowledgements -- About the Author -- About the Book -- Disclaimers -- CHAPTER 1 Asset Allocation -- Ingredients of Asset Allocation -- Lessons of the Recent Downturn -- So Are Bonds the Place to Invest? -- So What Happens When the Economy Turns Up? -- Some Necessary Tools for Analysis -- Appendix: Description of the Statistical Tools -- CHAPTER 2 Long-Run Returns on Stocks and Bonds -- Stocks and Bonds Since 1951 -- How Much More Attractive Are Stocks than Bonds? -- Real Returns -- Reconsidering Bond Returns -- Reconsidering Stock Returns -- Alternative Estimates of Long-Run Stock Returns -- Upper and Lower Bounds for Equity Returns -- Appendix: Alternative Estimates of Stock Returns -- CHAPTER 3 Small-Cap Stocks -- What Do We Mean by Small-Cap Stocks? -- Relative Performance of Large-Cap and Small-Cap Stocks-Russell Series -- Relative Performance of Large-Cap and Small-Cap Stocks-SBBI Series -- Relative Performance of Large-Cap and Small-Cap Stocks-Broader Analysis -- Large-Cap and Small-Cap Stocks in a Portfolio Context -- Summary-Key Features of Small-Cap Stocks -- CHAPTER 4 Value and Growth Investing -- Description of the Russell 1000 Indexes -- Relative Performance of Growth and Value Indexes -- Value and Growth Indexes for Earlier Periods -- Relative Performance of Small-Cap Growth and Value Stocks -- Portfolios with Growth and Value -- Summary-Key Features of Growth and Value Stocks -- CHAPTER 5 Foreign Stocks -- Returns on Foreign and U.S. Stocks -- Currency Capital Gains and Foreign Stock Returns -- Diversification Benefits of Foreign Stock Investing -- Are There Shortcuts to Owning Foreign Stocks? -- Summary-Key Features of Foreign Stocks -- CHAPTER 6 Emerging Markets -- What Is An Emerging Market? -- Emerging Stock Market Indexes -- Emerging Stock Market Returns.

Risks of Investing in Emerging Stock Markets -- Emerging Market Bonds-A Brief History -- Returns on Emerging Market Bonds -- Summary-Key Features of Emerging Market Stocks and Bonds -- CHAPTER 7 Bonds -- Treasury Bonds -- The Wider U.S. Bond Market -- Returns on U.S. Bonds -- Bond Markets Outside the United States -- Summary-Key Features of Bonds -- CHAPTER 8 Strategic Asset Allocation -- Expanding the Portfolio to Include Other Bonds and Stocks -- Expanding the Portfolio to Include Foreign Stocks -- The Dirty Secret of Optimization -- Alternative Approaches to Optimization -- Estimating Portfolio Returns-the Premium Method -- Portfolios in Practice-Example of MarketWatch.com's Lazy Portfolios -- Beyond the Traditional Efficient Frontier -- CHAPTER 9 Hedge Funds -- Investment Strategies -- Hedge Fund Returns -- Hedge Fund Biases -- Performance Across Managers -- Fund of Funds -- Hedge Funds in a Portfolio -- Summary-Key Features of Hedge Funds -- CHAPTER 10 Venture Capital and Private Equity -- Common Features of Venture Capital and Buyout Funds -- Venture Capital -- Returns on Venture Capital -- Buyout Funds -- Returns on Buyout Funds -- Key Features of Private Equity -- CHAPTER 11 Real Assets-Real Estate -- Real Estate Investment Trusts -- Direct Ownership of Real Estate -- Home Ownership -- Concluding Remarks -- CHAPTER 12 Real Assets-Commodities -- Sources of Return on Commodity Futures -- Returns on Commodity Futures -- Performance in a Portfolio -- Does Gold Belong in the Portfolio? -- Active Investment in Commodities-Managed Futures -- Summary-Key Features of Commodity Investments -- CHAPTER 13 Asset Allocation with Alternative Investments -- Diversifying into Real Estate-Alternatives for Ordinary Investors -- Expanding the Menu of Alternative Assets -- High Net Worth (HNW) Portfolios -- Ultra HNW Portfolios.

Lessons about Alternatives from the Yale Endowment -- Lessons about Alternative Investments Learned in the Financial Crisis -- Verdict on Alternative Investments -- CHAPTER 14 Investing and Spending by Foundations -- Spending Rules -- Estimating Future Bond and Stock Returns -- Volatility and Uncertainty -- Portfolios of Stocks and Bonds -- Description of the Spending Plan -- Using Historical Returns Since 1951 to Set Spending Rules -- Effect of Lower Stock Returns on Spending Rules -- Effects of Different Stock/Bond Allocations -- Concluding Comments -- CHAPTER 15 Investing and Spending in Retirement -- Longevity -- Spending Rules for Retirement -- Portfolios of Stocks and Bonds -- Baseline Case: Can Two Live More Cheaply Than One? -- Effects of Bequests and Variable Spending Rules -- How Can I Turn a Defined Contribution Plan into a Defined Benefit Plan? -- Concluding Comments-Postpone Retirement? -- CHAPTER 16 The Discipline of Asset Allocation-Rebalancing -- Rebalancing Defined -- Rebalancing When Times Are Good -- Rebalancing When Times Are Bad -- References -- Index.