Deep Risk: How History Informs Portfolio Design (Investing for Adults Book 3)

Deep risk: How History informs Portfolio Design is the third installment in the investing for adults series. this series is not for novices. This booklet takes portfolio design beyond the familiar “black box” mean-variance framework. Most importantly, the short-term volatility of financial assets, commonly measured as standard deviation, is a highly imperfect measure of the actual long-horizon perils faced by real-world investors subject to the vagaries of financial and military history. These risks have names—inflation, deflation, confiscation, and devastation—and any useful discussion of portfolio design of necessity incorporates their probabilities, consequences, and costs of mitigation. You’re an investment adult, so you know that the future efficient frontier lies well beyond our ken; presumably you already know all about the mechanics, long-term benefits, as well as the uncertainties, of wide diversification and factor tilt using low-cost, efficient vehicles and the risk/reward spectrum between all-fixed- income and all-equity portfolios. This booklet contains no magic formula for the “perfect portfolio,” but rather, with luck, a framework within which to think more clearly about risk.

• Skating Where the Puck Was: The Correlation Game in a Flat World (Investing for Adults Book 2)
• The Ages of the Investor: A Critical Look at Life-cycle Investing (Investing for Adults Book 1)
• Rational Expectations: Asset Allocation for Investing Adults (Investing for Adults Book 4)
• The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
• The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between
• The Four Pillars of Investing: Lessons for Building a Winning Portfolio
• If You Can: How Millennials Can Get Rich Slowly
• Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility, 2018 Edition
• All About Asset Allocation, Second Edition
• Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today