The Only Guide You'll Ever Need for the Right Financial Plan
Managing Your Wealth, Risk, and Investments
1. Auflage August 2010
240 Seiten, Hardcover
Wiley & Sons Ltd
ISBN:
978-1-57660-366-6
John Wiley & Sons
An accessible guide that outlines the key elements of an effective financial plan
From Larry Swedroe, the author of the bestselling series of "The Only Guide" investment books, with Kevin Grogan and Tiya Lim comes a step-by-step handbook that shows you how to develop a winning personal investment strategy and reveals what it takes to make that strategy part of your overall financial plan. The Only Guide You'll Ever Need for the Right Financial Plan focuses on the "art" of investing and gives you the information you need to create a strategy that is tailor-made for your particular situation.
Designed for savvy investors and professional advisors, this book offers the vital information needed for developing and implementing an overall strategic financial plan. In this essential resource, Swedroe outlines the basics in asset allocation and other investment planning concepts.
* Addresses how you can design an investment policy statement and an individual asset allocation plan
* Examines how to maintain your portfolio's risk profile in the most cost-effective and tax-efficient manner
* Offers insights on integrating risk management and estate planning issues into your plan
The Only Guide You'll Ever Need for the Right Financial Plan offers a handy tool to help you make more informed and prudent decisions that will go a long way to ensure a secure financial future.
Dedication.
Acknowledgments.
Preface.
Part I: Investment Policy in an Uncertain World.
Chapter 1: The Uncertainty of Investing.
Efficient Frontier Models.
Chapter 2: The Investment Policy Statement.
The Foundation of the Investment Plan.
The Need for Plan B.
The Worst Case Should Not Be the Base Case.
Part II: Allocation of Assets.
Chapter 3: Asset Allocation.
The Ability, Willingness, and Need to Take Risk.
When Conflicts Arise.
Risk Factors.
Chapter 4: Equities.
Equities versus Fixed Income.
U.S. Equity versus International Equity.
Emerging Markets.
Value versus Growth.
Small-Cap versus Large-Cap.
Real Estate.
Your Home.
Collateralized Commodity Futures.
Socially Responsible Investing.
Chapter 5: Fixed Income.
Credit Quality.
Short-Term versus Long-Term Maturities.
The Results at Different Equity Allocations.
Reasons to Reduce Maturity Risk.
Reasons to Increase Maturity Risk.
Municipal Bonds.
Inflation-Protected Securities.
Short-Term Fixed Income versus TIPS.
Chapter 6: Alternative Investments.
Convertible Bonds.
Covered Calls.
Fixed Income Currency Exposure.
EE Bonds.
Emerging Market Bonds.
Equity-Indexed Annuities (EIAs).
Gold.
Hedge Funds.
High-Yield (Junk) Bonds.
Leveraged Buyouts (LBOs).
Leveraged Funds.
Master Limited Partnerships.
Mortgage-Backed Securities (MBS).
Precious Metals Equities (PME).
Preferred Stocks.
Private Equity (Venture Capital).
Stable-Value Funds.
Structured Investment Products.
Variable Annuities.
Chapter 7: Liabilities and Asset Allocation.
Mortgages.
Prepay the Mortgage or Increase Tax-Advantaged Savings?
Other Liabilities.
Part III: Implementing the Plan.
Chapter 8: Individual Securities or Mutual Funds.
Convenience.
Diversification.
Size Matters.
Advantages of Individual Securities.
Separate Account Managers.
Word of Caution.
Fund Selection Criteria.
Chapter 9: Active versus Passive Management.
The Evidence.
The Search for the Holy Grail: Why Is Persistent Outperformance so Hard to Find?
The Value of Economic Forecasts.
The Value of Security Analysis.
Buy, Sell, or Hold?
The Tyrannical Nature of an Efficient Market.
The Prudent Investor Rule.
The Benefits of Passive Investing.
Summary.
Chapter 10: The Asset Location Decision.
Exceptions.
Order of Preference.
Additional Considerations.
Advanced Concept.
Balanced and Lifestyle Funds.
Chapter 11: The Care and Maintenance of a Portfolio.
Rebalancing.
Tax Management Strategies.
Other Tax Management Strategies.
Final Considerations.
Part IV: The Investment Plan and Financial Security.
Chapter 12: College Savings Plans.
529 Plans.
Prepaid Tuition Plans.
Coverdell Education Savings Accounts.
Custodial Accounts.
U.S Savings Bonds.
Financial Aid Impact.
Chapter 13: Insurance.
Risk Management.
Payout Annuities.
Long-Term Care Insurance.
Life Settlements.
Chapter 14: IRAs and Retirement/Profit Sharing Plans.
Roth versus Traditional IRA.
What to Do When Retirement Plan Choices Are Poor.
IRA Conversions.
Summary.
Chapter 15: Social Security.
How Benefits Are Determined.
When to Take Benefits.
Factors to Consider.
Taking Benefits Early.
Delaying Benefits.
Taxes.
Is Social Security a Balance Sheet Asset?
File and Suspend Strategy.
Double Dipping Strategy.
Summary.
Chapter 16: Determining a Safe Withdrawal Rate.
Monte Carlo (MC) Simulations.
In Absence of a Monte Carlo Simulation.
The Safe Withdrawal Rate.
The Sequencing of Withdrawals to Fund Retirement.
Traditional IRA versus Roth IRA.
Sensitivity Analysis.
Summary.
Chapter 17: Planning Beyond Your Lifetime.
Estate Planning.
Preparing Your Heirs.
Benefits of Creating a Family Wealth Mission Statement.
Conclusion.
Appendix A Effective Diversification in a Three-Factor World.
Appendix B Dollar Cost Averaging.
Appendix C Reverse Mortgages.
Appendix D How to Choose an Adviser You Can Trust.
Notes.
Glossary.
Index.
Acknowledgments.
Preface.
Part I: Investment Policy in an Uncertain World.
Chapter 1: The Uncertainty of Investing.
Efficient Frontier Models.
Chapter 2: The Investment Policy Statement.
The Foundation of the Investment Plan.
The Need for Plan B.
The Worst Case Should Not Be the Base Case.
Part II: Allocation of Assets.
Chapter 3: Asset Allocation.
The Ability, Willingness, and Need to Take Risk.
When Conflicts Arise.
Risk Factors.
Chapter 4: Equities.
Equities versus Fixed Income.
U.S. Equity versus International Equity.
Emerging Markets.
Value versus Growth.
Small-Cap versus Large-Cap.
Real Estate.
Your Home.
Collateralized Commodity Futures.
Socially Responsible Investing.
Chapter 5: Fixed Income.
Credit Quality.
Short-Term versus Long-Term Maturities.
The Results at Different Equity Allocations.
Reasons to Reduce Maturity Risk.
Reasons to Increase Maturity Risk.
Municipal Bonds.
Inflation-Protected Securities.
Short-Term Fixed Income versus TIPS.
Chapter 6: Alternative Investments.
Convertible Bonds.
Covered Calls.
Fixed Income Currency Exposure.
EE Bonds.
Emerging Market Bonds.
Equity-Indexed Annuities (EIAs).
Gold.
Hedge Funds.
High-Yield (Junk) Bonds.
Leveraged Buyouts (LBOs).
Leveraged Funds.
Master Limited Partnerships.
Mortgage-Backed Securities (MBS).
Precious Metals Equities (PME).
Preferred Stocks.
Private Equity (Venture Capital).
Stable-Value Funds.
Structured Investment Products.
Variable Annuities.
Chapter 7: Liabilities and Asset Allocation.
Mortgages.
Prepay the Mortgage or Increase Tax-Advantaged Savings?
Other Liabilities.
Part III: Implementing the Plan.
Chapter 8: Individual Securities or Mutual Funds.
Convenience.
Diversification.
Size Matters.
Advantages of Individual Securities.
Separate Account Managers.
Word of Caution.
Fund Selection Criteria.
Chapter 9: Active versus Passive Management.
The Evidence.
The Search for the Holy Grail: Why Is Persistent Outperformance so Hard to Find?
The Value of Economic Forecasts.
The Value of Security Analysis.
Buy, Sell, or Hold?
The Tyrannical Nature of an Efficient Market.
The Prudent Investor Rule.
The Benefits of Passive Investing.
Summary.
Chapter 10: The Asset Location Decision.
Exceptions.
Order of Preference.
Additional Considerations.
Advanced Concept.
Balanced and Lifestyle Funds.
Chapter 11: The Care and Maintenance of a Portfolio.
Rebalancing.
Tax Management Strategies.
Other Tax Management Strategies.
Final Considerations.
Part IV: The Investment Plan and Financial Security.
Chapter 12: College Savings Plans.
529 Plans.
Prepaid Tuition Plans.
Coverdell Education Savings Accounts.
Custodial Accounts.
U.S Savings Bonds.
Financial Aid Impact.
Chapter 13: Insurance.
Risk Management.
Payout Annuities.
Long-Term Care Insurance.
Life Settlements.
Chapter 14: IRAs and Retirement/Profit Sharing Plans.
Roth versus Traditional IRA.
What to Do When Retirement Plan Choices Are Poor.
IRA Conversions.
Summary.
Chapter 15: Social Security.
How Benefits Are Determined.
When to Take Benefits.
Factors to Consider.
Taking Benefits Early.
Delaying Benefits.
Taxes.
Is Social Security a Balance Sheet Asset?
File and Suspend Strategy.
Double Dipping Strategy.
Summary.
Chapter 16: Determining a Safe Withdrawal Rate.
Monte Carlo (MC) Simulations.
In Absence of a Monte Carlo Simulation.
The Safe Withdrawal Rate.
The Sequencing of Withdrawals to Fund Retirement.
Traditional IRA versus Roth IRA.
Sensitivity Analysis.
Summary.
Chapter 17: Planning Beyond Your Lifetime.
Estate Planning.
Preparing Your Heirs.
Benefits of Creating a Family Wealth Mission Statement.
Conclusion.
Appendix A Effective Diversification in a Three-Factor World.
Appendix B Dollar Cost Averaging.
Appendix C Reverse Mortgages.
Appendix D How to Choose an Adviser You Can Trust.
Notes.
Glossary.
Index.
"Larry Swedroes work comes as close to being the definitive investment book of our time as any that I can imagine. His greatest gift is his ability to communicate with profound simplicity, bringing clarity to the daunting challenge facing investors who are intent on reaching their financial goals."
--Bill Schultheis, author of The Coffeehouse Investor
"If you're looking to sharpen your financial thinking, let Larry Swedroe be your guide. With insights from The Only Guide You'll Ever Need for the Right Financial Plan, you should be able to raise your financial game--and maybe boost your family's wealth."
--Jonathan Clements, author of The Little Book of Main Street Money
"Just as every successful builder needs a blueprint, so too does every successful investor need a personally tailored investment policy. How much stocks, how much bonds? Foreign versus domestic? When and how to begin Social Security or withdrawing from your IRA? Larry Swedroe plots your financial life from cradle to grave (and even beyond). Don't invest without it!"
--William Bernstein, author of The Four Pillars of Investing
"This is a most excellent book! Either as a great educational read or an indispensible reference, The Only Guide You'll Ever Need for the Right Financial Plan will pay you back many times over the cover price."
--Harold Evensky, President, Evensky & Katz
"If you have investing experience, and want to improve your portfolio, this is the book to read."
--Taylor Larimore, coauthor of The Bogleheads' Guide to Investing
--Bill Schultheis, author of The Coffeehouse Investor
"If you're looking to sharpen your financial thinking, let Larry Swedroe be your guide. With insights from The Only Guide You'll Ever Need for the Right Financial Plan, you should be able to raise your financial game--and maybe boost your family's wealth."
--Jonathan Clements, author of The Little Book of Main Street Money
"Just as every successful builder needs a blueprint, so too does every successful investor need a personally tailored investment policy. How much stocks, how much bonds? Foreign versus domestic? When and how to begin Social Security or withdrawing from your IRA? Larry Swedroe plots your financial life from cradle to grave (and even beyond). Don't invest without it!"
--William Bernstein, author of The Four Pillars of Investing
"This is a most excellent book! Either as a great educational read or an indispensible reference, The Only Guide You'll Ever Need for the Right Financial Plan will pay you back many times over the cover price."
--Harold Evensky, President, Evensky & Katz
"If you have investing experience, and want to improve your portfolio, this is the book to read."
--Taylor Larimore, coauthor of The Bogleheads' Guide to Investing
LARRY E. SWEDROE is Principal and Director of Research for The Buckingham Family of Financial Services, which includes Buckingham Asset Management and BAM Advisor Services. Buckingham Asset Management manages more than $2 billion in assets for individuals, businesses, trusts, not-for-profits, and retirement plans. BAM Advisor Services provides turnkey asset management services for more than 120 registered investment advisor firms and manages or administers more than $9 billion in assets. Swedroe has held executive level positions at Prudential Home Mortgage, Citicorp, and CBS. He frequently speaks at financial conferences throughout the year and writes the blog "Wise Investing" for CBS MoneyWatch.com.
KEVIN GROGAN is an Investment Advisor Associate for The Buckingham Family of Financial Services.
TIYA LIM is an Investment Strategy Manager for The Buckingham Family of Financial Services.
KEVIN GROGAN is an Investment Advisor Associate for The Buckingham Family of Financial Services.
TIYA LIM is an Investment Strategy Manager for The Buckingham Family of Financial Services.