Smart Portfolios: A practical guide to building and maintaining intelligent investment portfolios Hardcover – September 18, 2017

Data backed and empirical simplification on portfolio construction and optimization - tops down approach to construct asset classes first, follow by industries sector/countries/... and more importantly, assign equal risk weight (not coach weight) to each of these boxes, and finally, propose weight adjustment based on momentum assets past SR...

As somebody with experience in the Financial industry I enjoyed the book and I think it gives a very solid framework for building your own portfolio; even if you don't follow Carver's approach in every single detail there is a lot to learn. It is not an easy reading for somebody not already familiar with investing and finance to a certain degree. I have some relatively minor criticism: it comes with a disclaimer, but equating standard deviation of returns with "risk" is a very dangerous and potentially misleading assumption. Volatility and risk are two entirely different animals. I also have the impression that most of the example portfolios in the book end up holding up split up in too many little pieces: does it really make sense to have a Germany ETF, a Spain ETF and a France ETF rather than a Eurozone ETF? I like the broad subdivisions he makes in asset classes but struggle to see the benefit of having more than 7-8 ETFs covering the whole spectrum. The writing is a bit pedantic at times but I reckon the subject is not the sexiest. A suggestion for a next edition would be an add-on with some Excel templates and maybe some coding examples.

I have read quite a many books about portfolio construction and I have to say this is one of the best or even the best book about the topic.The book introduces a practical way to build portfolios. I liked the discussion about practical limitations that are caused by investor’s home country, available etfs, investable money etc.

I was starting to be very annoyed at the thought that if left in a bank my savings would have slowly been eaten away by inflation and fees. I knew I had to invest those savings somehow, but was overwhelmed by the amount of information I could find scattered around the internet, and was very suspicious of any ready made product sold me by a bank or any third party. Then I read Smart Portfolios.This book tought me tons about the creation and maintenance of a carefully balanced and diversified portfolio of ETFs, of which I knew nothing before. You can read a lot on the internet about that, but honestly you won't find anything that is so systematic and well argumented by strong statistical evidence, and is scalable from a few thousands of pounds to several millions. I had no problem reading it and I honestly found it enjoyable, although people with a less technical mindset may find it less accessible.In short, this book will explain you step by step how to set up a systematic portfolio of ETFs depending on your account size and risk tolerance, how to diversify it in terms of asset classes and geography, how and how often to rebalance it while minimising the costs and maximising the expected returns. It will do so by also showing you what kind of results are statistically significant and which are not, why seemingly safe choices are dangerous, what kind of predictions about future returns might be reasonable and how much you can trust them to actually provide you better returns, and above all why systematic approaches work. Besides setting up a portfolio, I learned much more (how ETFs work internally, why actively managed funds tend to underperform, how important even small fees are, etc). There's lots of complete examples starting also from relatively modest accounts, and on his website there are pre-set spreadsheets that do the calculations explained in the book.This book is in a certain sense my most profitable investment and it did pay itself back in less than a couple of months.

In Carver's earlier 'Systematic Trading' (ST), he divides investors into three categories: asset-allocating investor, semi-automatic trader, and staunch systems trader. He provides the framework for all three, but really lays it out for the systems trader, as promised by the title.In contrast, 'Smart Portfolios' (SP) focuses on the first category, the buy and hold investor. Because semi-automatic trading requires a lot of experience (Buffet or Lynch-like) and systems trading requires technical expertise (be very comfortable with spreadsheets and programming), I believe that 'Smart Portfolios' will be much more useful for a great majority of investors.Rather than focusing on trading techniques, SP covers portfolio construction in detail: from how to build the portfolio to proper weighting using quantitative techniques. The simplest incarnation is a 40% equities, 60% bonds buy and hold portfolio with periodic rebalancing (maybe yearly). Of course, Carver is much more sophisticated, breaking down a variety of factors like sectors, asset-classes, and foreign-vs-domestic assets. He brings his institutional experience and research into the discussion.For most people, I highly recommend 'Smart Portfolios' over 'Systematic Trading' or 'Leveraged Trading'. In today's markets where governments are incentivized to pump equity markets, it's often more difficult to trade and beat a buy and hold portfolio. With the advent of ETFs, I believe the edge goes to portfolio construction as it is easier than ever to diversify or to harvest exposure to a variety of assets.