Foreword

THERE ARE TWO QUESTIONS I’M OFTEN ASKED ONCE I introduce myself as the head of investments at T. Rowe Price.

First, people are not shy about asking me what markets might do next or where to invest. Second, people ask how to become better investors or, more ambitiously, what makes an investor great.

On markets, I don’t have a crystal ball. None of us do. But after decades of investing, I can usually offer an answer that’s rooted in experience and informed by the research and insights of the talented investors I’m lucky enough to call my colleagues.

On what makes an investor great, most people don’t appreciate how rare truly great investors are. I have been fortunate enough to work with a number of them. I’ve learned—paraphrasing Leo Tolstoy’s principle that “all happy families are alike”—that great investors generally have things in common. Below-average managers are below average in their own way, but that’s a subject for another time.

Great investors have an almost insatiable intellectual curiosity. They want to know why things are the way they are and how they might be different. Many people love engaging with capital markets. What sets the great investors apart is their all-consuming passion for uncovering insights.

Great investors are original thinkers. I don’t mean just about markets. They are original thinkers in all aspects of their lives. What’s also important, though, is that original thinkers value other original thinking. They learn from, and challenge themselves through, a vigorous discourse with other investors. Great investors use that collaboration to arrive at their own original thinking. Our corporate culture at T. Rowe Price empowers these investors to thrive.

Great investors also have a process in which their intellectual curiosity and original thinking are grounded. This process, though differing from investor to investor, usually incorporates a few common traits. A great investor’s process is consistently rigorous and disciplined and rooted in deep research. The process is not just capturing lightning in a bottle, but something that is durable and repeatable over the long term.

This leads me to Sébastien Page, my colleague. He is one of the great investing minds on asset allocation, the subject of this book. Sébastien has a nearly unquenchable intellectual curiosity. He devours books, podcasts, studies, the latest thinking from a colleague, reams of data on capital markets. You name it, he’s read it, digested it, and thoroughly understands it.

Sébastien is an original thinker. He values, in turn, other original thinkers. Our Asset Allocation Committee comprises many of the most gifted investors at our firm. Sébastien brings their voices into a robust, sometimes contentious, discussion that informs our critical decisions. In this book, count the number of times he reflects on running down the hall to a colleague’s office with questions. Those questions so often stimulate informed, original thinking.

Finally, Sébastien and our asset allocation team are grounded in a durable, rigorous process. If you fail to establish a process, you will inevitably succumb to fear or greed. Sébastien’s process ensures our asset allocation team balances judgment with data and analysis in a disciplined, respectable way.

Sébastien is a thought leader on asset allocation. He is also an avid (and quite fast) runner, likes the occasional glass of wine, and tells a good story. As to this last point, I think you’ll agree as you learn more about him, his story, and multi-asset investing in the pages to come.

Rob Sharps

Head of Investments & Group CIO, T. Rowe Price