The goals-based investing framework is designed to maximize the probability of achieving our goals. This is a different objective than “maximizing our portfolio return” or “minimizing portfolio risk” and requires that we explicitly define, quantify, and prioritize our goals for all years in our investment time horizon. Once our goals are organized by priority and
Examining Future Market Scenarios
As we look forward into 2020 and beyond, we thankfully see the beginning of widespread distribution of a vaccine against COVID-19 and the peaceful transfer of political power after a very contentious election. Yet the prospects for global economic growth are still uncertain and highly dependent upon both the speed at which the pandemic is
Understanding Market Narratives
The year 2020 has been tumultuous in many different aspects of daily life, including in financial markets which sold off precipitously in the spring only to recover even more robustly over the months which followed. One way to help make sense out of the investment world in 2020 is by examining the various market narratives which dominated
The discipline of goals-based investing
We often describe goals-based investing as a framework, an approach, or a methodology. A more complete and robust characterization would be to view goals-based investing as a discipline. Though infrequently used in investment conversation, the term discipline implies more than a single process or mathematical methodology. A discipline can be viewed as a means to
Does Risk Always Produce Reward?
The notion that more risk equals more reward is a truism of investing and modern portfolio management. So why wouldn’t a rational investor seek out the greatest amount of risk when selecting investments for her portfolio? And how might we go about setting a portfolio “risk budget” that is appropriate for achieving our specific financial
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