Discover a masterful exploration of the fallacies and challenges of asset allocationIn Asset Allocation: From Theory to Practice and Beyond--the newly and substantially revised Second Edition of A Practitioner's Guide to Asset Allocation--accomplished finance professionals William Kinlaw, Mark P. Kritzman, and David Turkington deliver a robust and insightful exploration of the core tenets of asset allocation.Drawing on their experience working with hundreds of the world's largest and most sophisticated investors, the authors review foundational concepts, debunk fallacies, and address cutting-edge themes like factor investing and scenario analysis. The new edition also includes references to related topics at the end of each chapter and a summary of key takeaways to help readers rapidly locate material of interest.The book also incorporates discussions of:* The characteristics that define an asset class, including stability, investability, and similarity* The fundamentals of asset allocation, including definitions of expected return, portfolio risk, and diversification* Advanced topics like factor investing, asymmetric diversification, fat tails, long-term investing, and enhanced scenario analysis as well as tools to address challenges such as liquidity, rebalancing, constraints, and within-horizon risk.Perfect for client-facing practitioners as well as scholars who seek to understand practical techniques, Asset Allocation: From Theory to Practice and Beyond is a must-read resource from an author team of distinguished finance experts and a forward by Nobel prize winner Harry Markowitz.

Foreword to the First EditionPrefaceKey TakeawaysChapter 1: What is an asset classChapter 2: Fundamentals of asset allocationChapter 3: The importance of asset allocationChapter 4: Time diversificationChapter 5: DivergenceChapter 6: Correlation asymmetryChapter 7: Error maximizationChapter 8: FactorsChapter 9: 1/NChapter 10: Policy portfoliosChapter 11: The private equity leverage mythChapter 12: Necessary conditions for mean-variance analysisChapter 13: ForecastingChapter 14: The stock-bond correlationChapter 15: ConstraintsChapter 16: Asset allocation versus factor investingChapter 17: IlliquidityChapter 18: Currency riskChapter 19: Estimation errorChapter 20: Leverage versus concentrationChapter 21: RebalancingChapter 22: Regime shiftsChapter 23: Scenario analysisChapter 24: Stress testingChapter 25: Statistical and theoretical conceptsGlossaryIndex