Being an active practitioner of asset allocation for nearly 20 years, and having a degree in mathematics, I was eagerly looking forward to Thomas Hoglund’s “Mathematical Asset Allocation”. I soon realized, however, that I was trudging through a graduate-level text on the abstract theories and rigorous mathematical proofs of asset allocation. Not exactly light reading.

Hoglund’s book is not for the mathematically challenged. In fact, the author himself states that the book *“is for courses in mathematical finance, actuarial mathematics, financial derivatives, and financial engineering at the upper-undergraduate and graduate levels”*. Take this warning to heart, as the book contains dozens of intricate formulas and proofs. In addition, there are numerous exercises throughout each chapter for the interested reader who actually wants to try his hand at the demanding mathematical proofs.

As one with mathematical experience, I was comfortable with most of the material, but continually found myself bogged down in the details of the concepts. For example, Hoglund dissects the seemingly innocuous concepts of return and variance to the point of needing an entire chapter of formula-ridden text to get to the root ideas. While, these details are important at a theoretical level, there is not much of practical use to be found. To be fair, Hoglund did not write this book for the everyday investor or even seasoned financial advisor. This being the case, it is not surprising that the context of the book leans more towards the abstract and less towards the practical.

A book such as this is difficult to review in that it truly should be considered a college-level text book, as opposed to an “investment book”. As I think back to my years at Michigan attaining my MBA in finance, I recall similar texts. At the time I yearned for more practical knowledge, but there is something to be said for having some understanding of the underpinnings of modern financial theory. I am grateful for the exposure to financial theory as I believe it does help to build a solid foundation later when it comes times to actually implement the concepts. I would recommend “Mathematical Asset Allocation” only to those with both a strong math background, and the desire to learn the theoretical aspect of financial theory. Otherwise, Hoglund’s book will be a difficult read, and ultimately lead to confusion and perhaps even frustration on the part of the unsuspecting reader.