TITLE

Corrupted Investment Solutions

AUTHOR(S)
Jahnke, William
PUB. DATE
October 2004
SOURCE
Journal of Financial Planning;Oct2004, Vol. 17 Issue 10, p26
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article discusses various strategies and trends in the field of investment portfolio management in the U.S. as of October 1, 2004. For all the hoopla in the profession about managing investment portfolios to meet client objectives, this is one of the weakest areas in practice. Finding the best investment solution involves a complex union of forecasting, modeling, and processing. Most financial planners have been taught that the best forecasts for the stock and bond markets are produced from historical returns. What most financial planners do not know is that the theoretical foundation for extrapolating historical returns has been discredited in the highest circles of academic finance. It is not surprising that financial planners bought into using historical returns as the basis for asset-class return forecasts, it is easy and appears scientific. The solution to matching an investment solution to multi-period consumption goals needs to consider the client's multi-period consumption goals, savings, current investment holdings, other sources of income, taxes, the value added from security selection and market timing, and expenses. The most attractive investment solution is the one that produces the most attractive distribution of funding ratios.
ACCESSION #
14706812

 

Related Articles

  • Exploring 2 Stubborn Investment Issues. Warschauer, Thomas // Journal of Financial Planning;Jun2015, Vol. 28 Issue 6, p22 

    The article discusses factors that financial planners should consider when recommending portfolios to clients. Topics covered include segregation of a client's assets by goal, pros and cons of funding client goals simultaneously or sequentially, and the need for planners to incorporate...

  • Why We Count on Model Portfolios.  // Financial Planning;Apr2005, Vol. 35 Issue 4, p23 

    Explains the use of model-based portfolios in financial planning. Limitations of the use of portfolios based on risk and reward parameters; Advantages of model portfolios for financial planners; Factors to be considered in assessing financial risks.

  • Reader Spotcheck.  // Journal of Financial Planning;Apr2000, Vol. 13 Issue 4, p33 

    This article presents the result of the survey conducted by the periodical on various financial planning issues in the U.S. A statistics reveal that majority of financial planning practitioners failed to take formal steps to determine the value of their practice. Majority of consumers believe...

  • Multi-manager investments to grow in China. Lau, John // Asian Investor;Dec2008, p32 

    The article discusses the manager-of-managers and fund-of-funds concepts. Multi-manager investment products are established on the belief that not all money managers are good in all markets. Multi-manager products are aimed to spread investment money. Manager of managers may be responsible for...

  • How Advisors Can Help Investors Overcome Their Fear of Financial Planning. Spangler, Mike // Financial Planning;Oct2013, Vol. 43 Issue 10, pB4 

    The article discusses ways in which financial advisors and planners can ensure that investors receive the guidance they require to make the best financial decisions. It mentions investors' lack of distinction between fear of investing in general and fear of losing their assets or savings....

  • When Science Clashes with Art: The Financial Planner's Dilemma. Most, Bruce W. // Journal of Financial Planning;Jun96, Vol. 9 Issue 3, p36 

    This article discusses the dilemma faced by a financial planner in dealing with a client's feelings about money and other emotional aspects which can't be dealt with the help of any technological advancement, like the computer. There is little doubt that technology is revolutionizing the...

  • Innovations in Financial Planning...  // Journal of Financial Planning;Jun2000, Vol. 13 Issue 6, p29 

    This article introduces the Center for Fiduciary Studies, an organization which provides financial planning services, located at the University of Pittsburgh Katz Graduate School of Business in Pennsylvania. The center, founded by Roger C. Gibson and Donald B. Trone, offers courses for trustees...

  • The Mole: He Wants Consumers to Know What May Be Driving Your Recommendations. Lee, Shelley A. // Journal of Financial Planning;Apr2008, Vol. 21 Issue 4, p20 

    An interview with unnamed financial planner is presented. When asked about this work and the focus of his practice, he refers to being a fee-only planner and he provides financial planning in both personal and corporate planning. He also shares behind-the-scenes issues of planners and suggests...

  • Are You Doing Financial Planning? Stevick, Glenn // Advisor Today;Jan2006, Vol. 101 Issue 1, p26 

    The article presents information on financial planning, which is defined as a process that determines the client's financial goals and provides a plan for achieving them. The process involves six steps including setting up of financial goals, gathering relevant data and analyzing it, developing...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics