In Goals-Based Portfolio Theory, award-winning Chartered Financial Analyst® Franklin J. Parker delivers an insightful and eye-opening discussion of how real people can navigate the financial jungle and achieve their financial goals. The book accepts the reality that the typical investor has specific funding requirements within specified periods of time and a limited amount of wealth to dedicate to those objectives. It then works within those limits to show you how to build an investment portfolio that maximizes the possibility you’ll achieve your goals, as well as how to manage the tradeoffs between your goals.
In the book, you’ll find: - Strategies for incorporating taxation and rebalancing into a goals-based portfolio - A discussion of the major non-financial risks faced by people engaged in private wealth management - An incisive prediction of what the future of wealth management and investment management may look like
An indispensable exploration of investing as it actually works in the real world for real people, Goals-Based Portfolio Theory belongs in the library of all investors and their advisors who want to maximize the chances of meeting financial goals.
Table of Contents
Foreword by Jean LP Brunel, CFA ix
Preface: Goals-Based Investors and the Need for Better Theory xv
Acknowledgments xxvii
Chapter 1 The Story of the Idea: How Goals- Based Portfolio Theory Came to Be 1
Chapter 2 A Theoretical Foundation 11
Chapter 3 Allocating Wealth Across Goals and Across Investments 31
Chapter 4 Allocating Wealth Through Time 45
Chapter 5 Real Markets, Real Risk, Real Portfolios 65
Chapter 6 Insurance Through a Goals- Based Lens 85
Chapter 7 Impact Investing 97
Chapter 8 Taxes and Rebalancing 109
Chapter 9 Goals- Based Reporting 125
Chapter 10 Fragility Analysis of Goals- Based Inputs 137
Chapter 11 Human Risks 147
Chapter 12 Prudent Investing with High- Variance Assets: An Experimental Chapter 161
Chapter 13 As a Bridge Between Normative and Behavioral Finance 173
Chapter 14 The Future Structure of Wealth Management Firms 199
Some Final Thoughts 209
Index 219
