Veale - The investors guidebook to alternative investments: the role of alternative investments in portfolio design

THE INVESTORS
GUIDEBOOK TO

ALTERNATIVE
INVESTMENTS

THE INVESTORS
GUIDEBOOK TO

ALTERNATIVE
INVESTMENTS

The Role of Alternative
Investments in Portfolio Design

STUART R. VEALE

PRENTICE HALL PRESS

Published by the Penguin Group

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Copyright 2013 by Stuart R. Veale

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Library of Congress Cataloging-in-Publication Data

Veale, Stuart R.

The investors guidebook to alternative investments : the role of alternative investments in portfolio design / Stuart R. Veale. First edition.

p. cm

Includes index.

ISBN: 978-1-101-63367-0

1. Investments. 2. Portfolio management. I. Title.

HG4521.V43 2013

332.6dc23 2013024183

First edition: October 2013

PUBLISHERS NOTE: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If you require legal advice or other expert assistance, you should seek the services of a competent professional. Continued on .

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This book is dedicated to:

the ever-increasing number of investors who are perceptive enough to realize that the Western nations are collectively heading down the wrong path and have the courage to take the actions necessary to protect themselves and their families.

FREE NEWSLETTER

The field of alternative investments is changing constantly. To keep updated on changes, simply send your email address to stu@invest-perform.com. In exchange, youll receive a complimentary copy of Alternative Investment Quarterly Newsletter. I also welcome your comments, critiques, and ideas.

This book was developed using sources believed to be reliable but which are not guaranteed. Opinions, estimates, and forecasts constitute the authors judgment as of the date this material was submitted and is subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any instrument. Securities, financial instruments, or strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. Each reader must make independent decisions regarding any securities or financial instruments mentioned herein.

I finished the second edition of my book on investing called Stocks, Bonds, Options, Futures (SBOF) in 2001. Here we are 12 years later. While the second edition was still selling well, it was also overdue for an update. Over the last 12 years, much has changed in the way stocks and bonds were priced, traded, analyzed, packaged, and marketed. Specialists on the New York Stock Exchange were replaced with designated market makers. The volume of trades executed on the dark pools soared. Derivatives on rainfall and wind had become hot products. Twenty-four-hour trading became a reality. The variety of exotic options exploded. Exchange traded funds became the fastest-growing financial product in history, etc.

While I started out to write the third edition of SBOF, it quickly became clear the industry had become too broad and too complex to comfortably fit in one text. Therefore, after discussing it with my publisher and readers, I made the decision to break the book into four manageable volumes:

My hope is that by expanding the book into four volumes, Ill be able to make them more comprehensive, include more examples, and make the books more useful to my readers. While I made every effort to proof the text, there will undoubtedly be errors for which I assume full responsibility. It is my intent to update these volumes frequently and therefore I welcome my readers suggestions on which topics should be added, expanded, and omitted in future editions. Please email your questions, critiques, and comments to stu@invest-perform.com. I hope to answer every email I receive.

This book was prepared from sources believed to be reliable but which are not guaranteed. The research analyst(s) who is primarily responsible for this research and whose name is listed on the front cover certifies that: (1) all of the views expressed in this research accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analysts compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this research. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments, or strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein.