Table of Contents
List of Tables
Praise for
The Only Guide to Alternative Investments Youll Ever Need
The Good, the Flawed, the Bad, and the Ugly
BY LARRY E. SWEDROE AND JARED KIZER
A timely and valuable book. The authors describe twenty alternatives to investing in traditional U.S. stocks and bonds, and how they work. They tell you which ones to walk away from, which to consider (carefully!), and how to get involved. These are good-sense judgments that every investor should pay attention to.
JANE BRYANT QUINN
Author of Smart and Simple Financial Strategies for Busy People
At the risk of being clichd, Swedroe has done it again! I make it a point to read every book written by him. This time, its all about alternative investments, and Swedroe, running true to form, tells it exactly as it is. He pulls no punches, he holds nothing back. If he doesnt like something, he says so. If emerging markets equities are downright risky, he doesnt mince his words or try to put a puffy spin on it. That is what makes reading Swedroe so fascinating.
STUART KAHAN
Executive editor, CPA Wealth Provider
For investors looking to go beyond an S&P 500 Index fund and a bond fundand every investor shoulddont make a move until youve read The Only Guide to Alternative Investments Youll Ever Need. Full of historical evidence, practical advice, and specific investment ideas, this book provides a blueprint for what to include and what to avoid in an intelligently constructed portfolio.
ROBERT BROKAMP
Editor, The Motley Fools Rule Your Retirement service
As a financial journalist, Ive been recommending Larry Swedroes books for years because they are filled with invaluable advice that can make any reader a more successful investor. I will now be adding The Only Guide to Alternative Investments Youll Ever Need to my favored reading list.
LYNN OSHAUGHNESSY
Financial journalist and author, The College Solution
Larry Swedroe and Jared Kizer have written a different sort of investment book, and one that has been sorely needed: a comprehensive guide to the theory, peer-reviewed literature, and practical nitty-gritty of actually deploying portfolio assets. It is a gold mine for even the most experienced of practitioners, and a vital lifeline for small investors. This volume is destined to become the most marked and Postit-noted tome on the average investment shelf.
WILLIAM BERNSTEIN
Author of The Intelligent Asset Allocator and The Four Pillars of Investing
Whats missing in your library? Larrys new Alternative Investments! Youve already got tons of books on stocks, bonds, and funds. The OnlyGuide to Alternative Investments Youll Ever Need is all about the future of investing, the new stuff thatll give you an edge in the twenty-first century. An absolute must-read!
PAUL B. FARRELL, JD, PHD
Columnist, DowJones-MarketWatch
Author of The Millionaire Code, The Winning Portfolio, and The Lazy Persons Guideto Investing
Swedroe and Kizer provide a thorough analysis of the pros and cons of each alternative investment. They recommend good alternatives to add to a diversified portfolio of high-grade bonds and stocks. Perhaps more important, they warn investors about the dangers of truly bad and ugly alternatives.
DR. WILLIAM REICHENSTEIN, CFA
Pat and Thomas R. Powers Chair in Investment Management
Hankamer School of Business
Baylor University
Swedroe and Kizer have sorted through the clutter and confusion of alternative investments to provide the authoritative voice on these much hyped and frequently misunderstood financial products. Kudos to them for sharing their wisdom in a manner that can be easily understood by all.
BILL SCHULTHEIS
Author, The Coffeehouse Investor
What a great service this book is to the investing community! As investors reach out for higher returns, many will venture into the higher-risk category known as alternative investments. For those who are so tempted, this book provides an invaluable guide.
EDWARD R. WOLFE, PHD
Professor of Finance and Director of the Financial Planning Program
Western Kentucky University
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Attention Corporations
This book is available for bulk purchase at special discount. Special editions or chapter reprints can also be customized to specifications. For information, please e-mail Bloomberg Press, press@bloomberg.com, Attention: Director of Special Markets, or phone 212-617-7966.
This book is dedicated to the memory of Rubin Hersch.
He was a sweet, kind, and sensitive man
who enriched the lives of all those he touched.
Acknowledgments
NO BOOK IS ever the work of one person, or, as in this case, two people. This book is no exception. We would like to thank the principals at Buckingham Asset Management and BAM Advisor Services for their support and encouragement: Susan Shackelford-Davis, Paul Forman, Steve Funk, Bob Gellman, Ed Goldberg, Joe Hempen, Ken Katzif, Mont Levy, Steve Lourie, Vladimir Masek, Bert Schweizer III, and Stuart Zimmerman.
We also thank Steve Nothum for his help with the data. Laura Latragna and David Ressner both made major editorial contributions. We also thank RC Balaban for his tireless efforts at fact checking. Any errors are certainly our own.
We also thank Sam Fleischman, our agent, for all of his efforts.
We would be remiss if we did not thank Stephen Isaacs, editorial director of Bloomberg Press, for his faith in the book and for his ongoing support. We also thank our development editors, Janet Coleman and, especially, Erica Levy Klein, for their assistance. They both made invaluable contributions.
Larry adds the following: I would like to especially thank the love of my life, my wife, Mona, for her tremendous support and understanding for the lost weekends and many nights that I sat at the computer well into the early morning hours. She has always provided whatever support was needed, and then some. Walking through life with her has truly been a gracious experience.