Successful Investing Is a Process: Structuring Efficient Portfolios for Outperformance (Financial) - Hardcover

Lussier, Jacques

Hardcover

ISBN 10: 1118459903 ISBN 13: 9781118459904

Publisher: Bloomberg Press, 2012

Synopsis

A process-driven approach to investment management that lets you achieve the same high gains as the most successful portfolio managers, but at half the cost

What do you pay for when you hire a portfolio manager? Is it his or her unique experience and expertise, a set of specialized analytical skills possessed by only a few? The truth, according to industry insider Jacques Lussier, is that, despite their often grandiose claims, most successful investment managers, themselves, can't properly explain their successes. In this book Lussier argues convincingly that most of the gains achieved by professional portfolio managers can be accounted for not by special knowledge or arcane analytical methodologies, but proper portfolio management processes whether they are aware of this or not. More importantly, Lussier lays out a formal process-oriented approach proven to consistently garner most of the excess gains generated by traditional analysis-intensive approaches, but at a fraction of the cost since it could be fully implemented internally.

• Profit from more than a half-century's theoretical and empirical literature, as well as the author's own experiences as a top investment strategist
• Learn an approach, combining several formal management processes, that simplifies portfolio management and makes its underlying qualities more transparent, while lowering costs significantly
• Discover proven methods for exploiting the inefficiencies of traditional benchmarks, as well as the behavioral biases of investors and corporate management, for consistently high returns
• Learn to use highly-efficient portfolio management and rebalancing methodologies and an approach to diversification that yields returns far greater than traditional investment programs

About this title

About the Author

JACQUES LUSSIER, PhD, CFA, is the Chief Investment Strategist at Desjardins Asset Management, and has been with the company since 1995. He is the current VP of the Montreal chapter of the CFA (Chartered Financial Analyst) Society. He is a regular speaker at conferences, seminars, and webinars. Previously, Mr. Lussier taught finance at HEC Montréal. He holds a PhD in International Business with a minor in Bank Studies from the University of South Carolina, a master’s degree in Finance and a bachelor’s degree in Economics from HEC Montréal.

From the Back Cover

Investors, be they high-net-worth individuals, institutional investors or other large entities, are often convinced to entrust their portfolio management to a team or individual with seemingly unique experience or expertise, and they then incur significant costs for the knowledge, analysis, and resources associated with that expertise. However, as Jacques Lussier reveals, many successful portfolio managers improperly attribute their success in the long term to their ability to forecast which security, sector or asset class will outperform, when the successes may be explained by their risk structuring and risk management processes.

Understanding why some processes lead to outperformance allows investors to design portfolios whose excess performance will be statistically reliable. Successful Investing is a Process is all about investment processes and transparency of investment processes. It is about learning from more than half a century of theoretical and empirical literature and about learning from our experiences as practitioners.

The approach is based on an overall investment framework that seeks to increase long-term returns by using a combination of processes that are likely to have a persistent impact on performance. This approach can also simplify the complexity of portfolio management and make it more transparent, reduce its cost, exploit the inefficiencies of traditional benchmarks, introduce efficient portfolio management and rebalancing methodologies, exploit the behavioral biases of investors and of corporate management, structurally incorporate LDI (liability-driven investments) concerns, maximize the benefits of efficient tax planning and effectively use the concept of diversification whose potential is far greater than what is usually achieved in most investment programs.

The book is divided into four parts:

• Part One: Demystifies the fund management industry and debunks the belief that superior performance can be obtained only with superior analytical abilities.
• Part Two: Outlines the four dimensions of the investment process as well as basic notions and concepts about asset valuation and forecasting that are required to support the remainder of the book.
• Part Three: Explains how to build portfolio components and asset allocation processes that are statistically likely to outperform.
• Part Four: Combines everything into a coherent framework that can be adapted to the needs and requirements of individual investors and institutions.

Successful Investing is a Process demonstrates that the objective is not so much to outperform the market, but to let the market underperform. It offers a disciplined, process-oriented approach that is easier and less expensive to implement and follow―and more likely to produce superior results―than the traditional knowledge-based model.

From the Inside Flap

Investors, be they high-net-worth individuals, institutional investors or other large entities, are often convinced to entrust their portfolio management to a team or individual with seemingly unique experience or expertise, and they then incur significant costs for the knowledge, analysis, and resources associated with that expertise. However, as Jacques Lussier reveals, many successful portfolio managers improperly attribute their success in the long term to their ability to forecast which security, sector or asset class will outperform, when the successes may be explained by their risk structuring and risk management processes.

Understanding why some processes lead to outperformance allows investors to design portfolios whose excess performance will be statistically reliable. Successful Investing is a Process is all about investment processes and transparency of investment processes. It is about learning from more than half a century of theoretical and empirical literature and about learning from our experiences as practitioners.

The approach is based on an overall investment framework that seeks to increase long-term returns by using a combination of processes that are likely to have a persistent impact on performance. This approach can also simplify the complexity of portfolio management and make it more transparent, reduce its cost, exploit the inefficiencies of traditional benchmarks, introduce efficient portfolio management and rebalancing methodologies, exploit the behavioral biases of investors and of corporate management, structurally incorporate LDI (liability-driven investments) concerns, maximize the benefits of efficient tax planning and effectively use the concept of diversification whose potential is far greater than what is usually achieved in most investment programs.

The book is divided into four parts:

• Part One: Demystifies the fund management industry and debunks the belief that superior performance can be obtained only with superior analytical abilities.
• Part Two: Outlines the four dimensions of the investment process as well as basic notions and concepts about asset valuation and forecasting that are required to support the remainder of the book.
• Part Three: Explains how to build portfolio components and asset allocation processes that are statistically likely to outperform.
• Part Four: Combines everything into a coherent framework that can be adapted to the needs and requirements of individual investors and institutions.

Successful Investing is a Process demonstrates that the objective is not so much to outperform the market, but to let the market underperform. It offers a disciplined, process-oriented approach that is easier and less expensive to implement and follow—and more likely to produce superior results—than the traditional knowledge-based model.

Edition details

• Publisher: Bloomberg Press
• Publication date: 2012
• Language: English
• ISBN 10: 1118459903
• ISBN 13: 9781118459904
• Binding: Hardcover
• Edition number: 1
• Number of pages: 384