Goals-Based Portfolio Theory

An in-depth overview of investing in the real world

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.

FRANKLIN J. PARKER, CFA, is the award-winning author of dozens of peer-reviewed articles and trade publications. He is a CFA charterholder, international speaker, founder of a Texas-based RIA, and a strategic advisor to journals, funds, and wealthy families.

Forward, by Jean LP Brunel CFA 4

Preface: Goals-Based Investors and the Need for Better Theory 9

1. The Story of the Idea: How Goals-Based Portfolio Theory Came to Be 19

2. A Theoretical Foundation 28

3. Allocating Wealth Across Goals and Across Investments 44

4. Allocating Wealth Through Time 55

5. Real Markets, Real Risk, Real Portfolios 71

6. Insurance Through a Goals-Based Lens 89

7. Impact Investing 98

8. Taxes and Rebalancing 107

9. Goals-Based Reporting 121

10. Fragility Analysis of Goals-Based Inputs 131

11. Human Risks 140

12. Prudent Investing with High-Variance Assets: An Experimental Chapter 151

13. As a Bridge Between Normative and Behavioral Finance 161

14. The Future Structure of Wealth Management Firms 182

Endnote: Some Final Thoughts 191

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.