Applied Financial Macroeconomics and Investment Strategy: A Practitioner’s Guide to Tactical Asset Allocation (Global Financial Markets)

I think this is a great book for market practitioners. If you are looking for rigorous economics analyses, this is defo not the good choice. However, if you are, say, an LS equity or fixed income investment analyst, this is a good book to help you obtain a good sense of the macro economy. But be cautious that towards the end of the book, the author put forward many of his own opinions. Ofc, be sure to tailor these opinions towards your own understanding of the market and never take them for granted.

If you want to do rotation based on economic cycles, this is the book that you must read. It is written in a very accessible style, but the conclusion is convincing -- some are intuitive while others are unconventionally insightful. A great help as the global economy evolves in the post-COVID world!

If you are considering purchasing this book then I assume you know that successful investing requires a knowledge of how the economy works, since the markets are just a reflection of the real economy. Due to this I'd rate this book as a "must read". This book does a good job at giving the economic background for the business cycle and how it is directly related to the stock, bond and commodity markets. If you have any hope of forecasting and determining where the markets are going for asset allocation purposes, then this knowledge is necessary. Even someone with an already solid base of this topic will likely pick up a few new things from this book. For further reading on this topic, specifically for information on precise timing using these macroeconomic fundamentals, look to authors George Dagnino and Martin Pring. Also, John Murphy for intermarket relationships which occur due to changes in the macroeconomic environment/business cycle. For further background on the fundamentals and how they relate to market cycles look to Ed Easterling. The only thing that I did not care for in this book is that the author feels the need to throw in a lot of personal opinion regarding how the economy and financial system should be influenced by the Federal Reserve and government. This was unnecessary and only detracted from the otherwise excellent book. The first part of this book is packed with well presented information but the author slowly starts to pepper in comments more and more frequently until the last part of the book is no longer concrete information but is an opinion piece about "lessons learned" from how crises were handled. The author is a dyed in the wool Keynesian and he talks as if he likely has a statue of Keynes in his office. Instead of sticking to the facts about how the markets react to inflation he goes on and on about the wonders of inflation and how central banks in other countries are not as smart as him or his friends. This is obviously debatable. He clearly has friends in the Federal Reserve and/or advises them. The constant shots at other countries gets old very quickly. If you can get past this stuff then the book is top notch. If it wasn't for this then the book would get 5 stars.

As others have said, this is perhaps the best investing book I have ever read. Everything before this seems trivial and like noise. The author provides simple but seemingly accurate (backed by historical correlations and research) explanations for what happens, why, and what one can anticipate in this conditions. This is a no-kidding ‘how-to’ macro invest book.

This great book was passed around here at MarketCycle. It was written by someone that clearly knows their way around financial markets and market cycles in particular. It is mainly geared toward professional investors and money managers that already have some experience. I do not know the author (Robert McGee). If you manage money professionally, my advice is to buy the book and then read it twice.

As a layman, I found this to be an excellent read and basis to avoid the simple "buy and hold". It would have been nice to have had a more "balanced" portfolio in my youth during 2000-2001 and 2008. Ignorance was not bliss at that time ;-) Having no formal education in economics (though some grad level stat classes), I was able to still glean significant and relevant information.

This is simply the best book I have found when it comes to connecting the macroeconomic cycle with investing. Will be too advanced for novice investors, but if you manage money then you need this book on your shelf. Simply awesome.

The headline to this review may be deemed irrelevant since the author states right off the bat that this is a book oriented to asset management professionals or soon-to-be ones. However, I thought it could be helpful to any individual investor who ended up here. By “not critical” I don’t mean useless. On the contrary, I think it is very educational. The problem is that I don’t think applied financial macroeconomics consists of an investing approach in itself. It is definitely a very strong complement. But nothing more than that. Being time and resource constrained, individual investors need to be very efficient in the way they plow through information and make decisions. They don’t care if the investment philosophy sounds appealing, they just need it to work and be easy to implement. And it’s for that reason that this is not a critical book for them. The author’s thesis is based on the idea that the business cycle is a critical factor explaining major fluctuations in the different asset classes (equity, bonds, and commodities). This is true in the sense that, every time there has been a recession or depression, there has also been a major correction (or a straight up crash) in the stock market. The problem is that those are not the only times when the stock market has suffered major corrections. The popular saying “the stock market has predicted 9 of the last 5 recessions” implies that there are almost twice as many stock market cycles than business cycles (please, don't take this literally). And remember, you’re trading the stock market, not the real economy. I don’t think any investor found any comfort in the fact that the real economy was not in a recession in 1987 after Black Monday. Even the author himself shows how since 1945 the frequency, duration, and magnitude of the business cycle has decreased considerably. In particular, there have only been 5 recessions in the last 40 years. That’s an average of 1 recession every 8 years. In fact, the average has been more like 1 recession every 12 years since the beginning of the secular bull market that started in the early 80’s. That might be just too infrequent to be used as a foundation for an investment strategy. Another problem with the business cycle approach is that it uses old data. Although there are some leading indicators around, in general all these macroeconomic data is about the past. And, as we know, the stock market is a forward looking mechanism. So, if you have to wait for the macro data to become available, you will more often than not be late to the party. In general, I think there are much easier and efficient ways to play the market cycles. That starts with focusing on the actual tradeable cycles (those of the asset classes) instead of on the ones underlying the real economy. Now, there are two major positive aspects about this book. First, it is very original. There are not too many books on this topic. In fact, I only know of one (Expected Returns by Ilmanen), and that actually has a more academic bias. Second, it approaches the analysis of macroeconomic events using the right methodology. That is, it avoids the rigidity of mathematical models from academia to favor an approach based on history, concepts, and common sense. That is not a minor point. In fact, it is huge one. The reason why this is a very educational read beyond its practical implementation.

The book is a jewel. I dont know who is the author but this is the book I would liked to have when I started in Finance, but also an amazing piece for an experienced profesional. The book sets a non-quantitative framework for understanding cycles and its effects on financial assets. It uses a top-down analysis of the economy and produces a useful view of the forest (i.e. its not a detailed analysis of the trees). Really really helpful, would recommend to anyone

The chapter on monetary policy alone makes this book a worthwhile read. Highly recommend.

様々な資産クラスの投資リターンが、マクロ経済動向とシステマチックに関連している事を解説した本。景気サイクルの各局面における投資リターンについて、現実の例を踏まえて説明している。 ノウハウとしては個人投資家レベルでコモディティ化していてもおかしくない内容である。専門家でなくとも基本に沿って公開情報を集めれば、簡便なロジックを作れるからだ。但し、目先の騰落ではなく大きな動きを確率的に把握する手段である為、定点観測の仕組みに加え、信念と胆力も必要になるかもしれない。 資産運用分野でのFintechとして最も実装しやすい類の専門ノウハウである為、いずれ一般的になるのではなかろうか。

This book is awesome. super informative especially on monetary policy and articulating the Fed's perspective and their policies' impact on different asset classes. Actually the best ever book around investment strategy I've read so far. Really appreciate and recommend it.

Ottimo libro. Teorico quanto basta. Molto spazio agli aspetti pratici. Molto documentato. Utilissimo. Un must per l'investitore.