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Library of Congress Cataloging-in-Publication Data Alternative investments and strategies / edited by Rüdiger Kiesel, Matthias Scherer & Rudi Zagst. p. cm. ISBN-13: 978-9814280105 ISBN-10: 9814280100 1. Investments--Moral and ethical aspects. 2. Portfolio management--Moral and ethical aspects. I. Kiesel, Rüdiger, 1962– II. Scherer, Matthias. III. Zagst, Rudi, 1961– HG4515.13.A498 2010 332.6--dc22 2010013167
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Asset allocation investigates the optimal division of a portfolio among different asset classes. Standard theory involves the optimal mix of risky stocks, bonds, and cash together with various subdivisions of these asset classes. Underlying this is the insight that diversiﬁcation allows for achieving a balance between risk and return: by using different types of investment, losses may be limited and returns are made less volatile without losing too much potential gain. These insights are...