Grasp the theoretical foundations of major investment tools
Teaching and learning aids include: Easy-to-use Excel templates with immediately accessible tools.
Accessible PowerPoint slides, sample exam and quiz questions and sample syllabi Video lectures
Proliferation of mathematics in economics, growing sophistication of investors, and rising competition in the industry requires advanced training of investment professionals. Portfolio Management provides expert guidance to this increasingly complex field, covering the important advancements in theory and intricacies of practice. SCOTT D. STEWART, P H D, CFA, is Clinical Professor of Finance and Accounting and Faculty Co-Director of the Parker Center for Investment Research at the SC Johnson College of Business, Cornell University. CHRISTOPHER D. PIROS, P H D, CFA, was Managing Director of Investment Strategy and Chairman of the Investment Policy Committees for Hawthorn, PNC Family Wealth ® and PNC Institutional Asset Management. JEFFREY C. HEISLER, P H D, CFA, is Managing Director of the Investment Research Group for TwinFocus Capital Partners.
The investment landscape is ever-changing. Today's innovative solution will be taken for granted tomorrow. In writing Portfolio Management: Theory and Practice , our goal is to expose readers to what it is really like to manage money professionally by providing the tools rather than the answers . This book is an ideal text for courses in portfolio management, asset allocation, and advanced or applied investments. We've also found it to be an ideal reference, offering hands-on guidance for practitioners.
Broadly speaking, this book focuses on the business of investment decision making from the perspective of the portfolio manager-that is, from the perspective of the person responsible for delivering investment performance. It reflects our combined professional experience managing multibillion-dollar mandates within and across the major global and domestic asset classes, working with real clients, and solving real investment problems; it also reflects our experience teaching students.
We taught the capstone Portfolio Management course in the graduate programs in Investment Management at Boston University and Reykjavik University for over ten years, and advanced portfolio management courses at Cornell University for five. By the time students took our classes most of them had worked in the industry and were on their way to mastering the CFA Body of KnowledgeTM required of candidates for the CFA® designation. The courses' curricula were designed to embrace and extend that knowledge, to take students to the next level. This text grew from these courses and was refined and improved as successive versions of the material 1 were used in our classes and by many other instructors in the Americas, Asia, and EMEA beginning in 2010.
This book aims to build on earlier investment coursework with minimal repetition of standard results. Ideally a student should already have taken a broad investments course that introduces the analysis of equity, fixed income, and derivative securities. The material typically covered in these courses is reviewed only briefly here as needed. In contrast, new and more advanced tools are accorded thorough introduction and development. Prior experience with Microsoft Excel spreadsheets and functions will be helpful because various examples and exercises throughout the book use these tools. Familiarity with introductory quantitative methods is recommended as well.
We believe this book is most effectively used in conjunction with cases, projects, and real-time portfolios requiring hands-on application of the material. Indeed this is how we have taught our courses, and the book was written with this format in mind. This approach is facilitated by customizable Excel spreadsheets that allow students to apply the basic tools immediately and then tailor them to the demands of specific problems.
It is certainly possible to cover all 16 chapters in a single-semester lecture course. In a course with substantial time devoted to cases or projects, however, the instructor may find it advantageous to cover the material more selectively. We believe strongly that Chapters 1 , 2 , and 14 should be included in every course- Chapters 1 and 2 because they set the stage for subsequent topics, and Chapter 14 because ethical standards are an increasingly important issue in the investment business. In addition to these three chapters, the instructor might consider creating courses around the following modules:
The investment business: Chapters 3 , 6 , 13 , and 16
These chapters provide a high-level perspective on the major components of the investment business: clients, asset allocation, the investment process, and performance measurement and attribution. They are essential for those who need to understand the investment business but who will not be involved in day-