The Discerning Investor : Personal Portfolio Management in Retirement for Lawyers (and Their Clients) / Julie Jason.

Format:

Book

Author/Creator:

Jason, Julie, author.

Language:

English

Subjects (All):

Finance, Personal.

Finance, Personal--United States.

Physical Description:

1 online resource (167 pages)

Edition:

;2022-08.

Place of Publication:

Cleveland : American Bar Association, 2022.

Chicago, Illinois : American Bar Association, [2022]

Summary:

The goal of The Discerning Investor is to give you the tools to prepare for retirement on your own terms. Part I lays out a conceptual framework for managing a retirement portfolio, with an emphasis on anticipating and thus avoiding mistakes such as misjudging risk. It sets out the basics of personal portfolio management and walks you through how to parse some common metrics and types of market data. Part II focuses on the "personal" part of personal portfolio management and provides a framework for developing an investment strategy to fit your particular situation. Part III covers the pros and cons of two different approaches to portfolio management: 1) retaining a firm to manage everything, or 2) managing your portfolio yourself and using a brokerage firm to execute trades. Part IV comes back to personalization and offers self-assessment tools to help you flesh out your investment strategy and move from planning to action. This is a book for investors who happen to be lawyers, written by a lawyer who happens to be investment counsel. The author's unique perspective and expertise are particularly apparent in her detailed overview of Form CRS, a disclosure document mandated by the SEC which was first rolled out in June 2020. Whether you are managing your portfolio yourself or retaining a firm to manage it for you, Form CRS can help you to quickly grasp what your client experience might be like with a given brokerage or investment firm based on its service offerings and the conflicts embedded in the way it does business. This book gives you all the information you will need to use this new and valuable tool to ensure that your investment portfolio is in good hands. Table of Contents: Introducing Personal Portfolio Management Avoiding Mistakes: A Historical Perspective on the Stock Market Uncertainty: The Investor's Dilemma Measures for The Risk-Averse Investor Turning Inward: Preparing for the Future Creating Investment Objectives Setting Strategy Based on Three Goals Reports and Reviewing Progress Financial Firms: Who's Who and What to Expect as a Client Do Standards of Care Matter? Should They? Expect to Experience Conflicts of Interest: But Choose Not To Form CRS is Key Let's Talk: The SEC's "Conversation Starters" and More Introducing the "Know Your Representative Rule" The Future is Yours: What Will You Do Next?

Contents:

Intro

Praise for The Discerning Investor

Title Page

Copyright Page

Dedication

Foreword

Contents

Introduction

Part I: Personal Portfolio Management and The Markets

Chapter 1: Introducing Personal Portfolio Management

Defining Personal Portfolio Management

Time Horizon

Your Personal Role

Four More Points to Ponder

Financial Expertise

Key Takeaways

Chapter 2: Avoiding Mistakes: A Historical Perspective on the Stock Market

Learning from the Past

A Conservative Retiree Reacting to a Bull Market

A Conservative Retiree Reacting to a Bear Market

Market Timing

Lessons from Difficult Market Periods

Flash Crashes

Bear Markets

Intra-Year Volatility

Time Diversification

Chapter 3: Uncertainty: The Investor's Dilemma

Only the Clairvoyant Can Predict the Market with Certainty

How to Lessen Risk with Diversification

Diversified Portfolios: Risk Free?

Asset Class Returns over the Long Term

Practical Application Example

Perfect Timing: When the Market Was a "Sure Bet"

Period A: Start at a Market Top (1999-2002)

Period B: Start at a Market Bottom (2002-2020)

Period C: Start at Period A and Hold through Period B (1999-2020)

Sequence of Return Risk: Portfolio Withdrawals

Obvious Risk: A Wet Hand

an Electrical Socket

Chapter 4: Measures for the Risk-Averse Investor

Setting the Stage

MPT's Efficient Frontier

How to Further Lessen Uncertainty

MPT and PMPT Terms

Short Illustration

Four Portfolios

Sharpe and Sortino Ratios

Maximum Drawdowns

Twenty-Year Returns

Context for Retirees: Risk versus Return

Adding Risk through Leverage.

Liquidity Restrictions

Part II: Personal Portfolio Management Principles

Chapter 5: Turning Inward: Understanding Cash Flow Prepares You for the Future

Cash Flow Drives

Expectations

Household Cash Outflow: Living Expenses

Essential versus Discretionary Expenses

Inflation Expectations

Taxes

Nonroutine Outflow

Inflow from Non-Portfolio Income

The Retirement Income Gap

The Role of Savings: After-Tax Returns

Source of Funding Portfolio Withdrawals

The 4 Percent Rule?

Caution: Don't Forget Taxes

Monte Carlo Simulations

Cash Flow Sensitivity Analysis

Avoid Portfolio Construction Shortcuts

Chapter 6: Creating Investment Objectives

Investment Policy Statement

An Example

Purpose Statement

Client Summary

Proposed Portfolio

Monitoring Statement

Client Acceptance

Chapter 7: Setting Strategy Based on Three Situations and Goals

Your Situation/Your Goals

No Retirement Income Gap

Covering the Retirement Income Gap

Demand-Driven Portfolio

Introducing the "Coverage Ratio"

Illustration

Who Can Use the Demand-Driven Process?

Chapter 8: Reports and Reviewing Progress

Custody

Brokerage Statements

Investment Adviser Reports

Information You Might Want to See

1. Allocation by Objective

2. Allocation Over Time by Objective

3. Performance by Objective

4. Holdings by Objective

5. Performance Evaluation

6. Index Returns

When Are Indices Useful/Not Useful?

Best Metrics

Part III: New Due Diligence Tools Help You Make Informed Decisions

Chapter 9: Financial Firms: Who's Who and What to Expect as a Client

Regulation

Investor Confusion? Seeking Clarity

The SEC Delivers

The SEC's Four 2019 Releases

The SEC's Three 2018 Releases.

You Have Choices Based on Your Needs

The Playing Field

Chapter 10: Do Standards of Care Matter? Should They?

Should the Standard Be the Same for Brokers and Advisers?

The Fiduciary Standard of Care for Investment Advisers

The Broker-Dealer Standard of Care

Disclosure Obligation

Care Obligation

Conflicts of Interest Obligation

Compliance Obligation

Chapter 11: Expect to Experience Conflicts of Interest, but Choose Not To

Dual Registrant Representatives Wear Two Hats

Example of "Hat Switching"

Example of a Variable Annuity Sales Conflict

Example of a 529 Plan Conflict

Example of a Mutual Fund Share Class Conflict

Example of a Unit Investment Trust Conflict

Example of Bond Purchases and Sales

Investment Adviser Conflicts

Third Party Payments

Fiduciary Status Is Not Enough

Direct Payments from the Client

Is There Such a Thing as a Conflict-Free Firm or Representative?

Due Diligence Efforts Depend on Business Models

Chapter 12: Form CRS Is Key

First Things First: The Firm

How to Read the CRS

Item 1. Introduction

Item 2. Relationships and Services

Item 3. "Fees, Costs, Conflicts, and Standard of Conduct"

Item 3 (Continued): Fees

Item 3 (Continued): Description of Other Fees and Costs

Item 3 (Continued): Additional Information

Item 3 (Continued): Standards of Conduct

Item 3 (Continued): Best Interest

Item 3 (Continued): Making Money and Conflicts

Item 3 (Continued): Making Money

Item 4. Disciplinary History

Item 5. Additional Information

Chapter 13: Let's Talk: The SEC's "Conversation Starters" and More

Conversation Starters

Tell Me about Your Firm

What About Financial Incentives?

Are There Disciplinary Disclosures?

Two More Questions

Supervisor.

Key Takeaways

Part IV: Portfolio Management Gets Personal

Chapter 14: Introducing the "Know Your Representative Rule"

KYR Assessment

Rating Results

How to Use KYR Ratings

Chapter 15: The Future Is Yours: What Will You Do Next?

Lessons from Behavioral Economics

15 Questions Lead to Setting Personal Priorities

What to Make of Your Ratings: The Goal Is Choosing Wisely

Epilogue: Your Role as Mentor, Coach and Role Model

Appendix A: The Effect of Taxes When Withdrawing Monthly

Appendix B: Mutual Fund Prospectus Disclosure of Share Classes

Appendix C: How to Check Out Your Representative and Firm Using BrokerCheck

The Representative

The Firm

Appendix D: For Investment Advisers

Form ADV contains five parts

Appendix E: DRP Instructions for ADV Part 1A (Item 11 Disclosure Information)

Suggested Reading

The Classics

Investing

Retirement, IRAs

Social Security

About the Author

Acknowledgments

Index.

Notes:

Title from eBook information screen..

Description based on print version record.

Other Format:

Print version: Jason, Julie The Discerning Investor

ISBN:

1-63905-063-9