Using Asset Allocation for Protection and Growth
by Charles Rotblut, CFA and David Darst
David Darst is a managing director and chief investment strategist of Morgan Stanley Smith Barney. He is also the author of “The Little Book That Saves Your Assets: What the Rich Do to Stay Wealthy in Up and Down Markets” (John Wiley & Sons, 2008). I met David at the CFA Institute Conference in May and spoke with him shortly afterward about asset allocation.
—Charles Rotblut, CFA
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Charles Rotblut (CR): Can you explain why investors need asset allocation?
David Darst (DD): Well, I think this goes along with AAII’s mission and purpose. Nobody would try to operate on themselves or rewire their home, unless they had full-time training and experience. And I think that the point of asset allocation is to reduce risk. That’s one of the keys of my personal investment philosophy, which comes through in my book, “The Little Book That Saves Your Assets” (John Wiley & Sons, 2008). Asset protection is paramount. People work like crazy to get a little money to invest. You need that to grow to preserve purchasing power, but at the same time, you’ve got to have some defensiveness and some protection. So my asset allocation philosophy is made up of four very simple tenets.
First, asset protection is paramount.
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David Darst is a managing director and chief investment strategist of Morgan Stanley Smith Barney. He is also the author of “The Little Book That Saves Your Assets: What the Rich Do to Stay Wealthy in Up and Down Markets” (John Wiley & Sons, 2008).
Discussion
David Darst is a light-weight.
There is nothing here you can't find in a 20-year old text on invesintg. But note his starting off with the notion that you need the 'council' of an 'expert' ( like him ? don't make me laugh )
What he says that is more true than false is trite in the extreme. His talk on correlation is painfully naive given the inherent instability of asset return correlations over time.
He avoids any talk about the relevance of valuation becasue he knows good valuation skills are difficult to acquire and he does not have them. Don't waste your time reading this guy's book or listening to him. For God's sake don't invest with him. He offers no value-added insights, he simply exploits the ignorant and the desparate.
posted 9 months ago by C from Rhode Island
I think the article was well written and useful for those of us that do not read financial textbooks.
There were a lot of helpfull reminders for me. I do not use a financial planner and these discussions are very useful forme
TPK
posted 9 months ago by Thomas from Pennsylvania
I agree that Darst says a lot of meaningless things; very little is actionable.
I have seen him in person many times and consistently walk away disappointed.
posted 9 months ago by Stephen from New York
darst used to be a branch manager of a Goldman Sachs brokerage office. asked about some of the then current GS stock research, he said "I never buy stocks, only T-bills". Of course, the yield at that time was much higher.
posted 9 months ago by William from Texas
