Private Wealth: Wealth Management In Practice

Foreword ix

Introduction 1

Part I: Life-Cycle Investing Chapter 1

Chapter 1 The Future of Retirement Planning 7
Robert C. Merton

Reprinted from The Future of Life-Cycle Saving and Investing, The Research Foundation of CFA Institute (October 2007):5–18.

Chapter 2 Is Personal Finance a Science? 19
Paul A. Samuelson

Reprinted from The Future of Life-Cycle Saving and Investing, The Research Foundation of CFA Institute (October 2007):1–4.

Chapter 3 Lifetime Financial Advice: Human Capital, Asset Allocation, and Insurance 23
Roger G. Ibbotson; Moshe A. Milevsky; Peng Chen, CFA; and Kevin X. Zhu

Reprinted from The Research Foundation of CFA Institute (April 2007).

Chapter 4 The Theory of Optimal Life-Cycle Saving and Investing 99
Zvi Bodie, Jonathan Treussard, and Paul Willen

Reprinted from The Future of Life-Cycle Saving and Investing, The Research Foundation of CFA Institute (October 2007):19–37.

Chapter 5 Is Conventional Financial Planning Good for Your Financial Health? 117
Laurence J. Kotlikoff

Reprinted from The Future of Life-Cycle Saving and Investing, The Research Foundation of CFA Institute (October 2007):55–71.

Chapter 6 The Life Care Annuity 133
Mark J. Warshawsky

Reprinted from The Future of Life-Cycle Saving and Investing, The Research Foundation of CFA Institute (October 2007):103–106.

Chapter 7 The Longevity Annuity: An Annuity for Everyone? 137
Jason S. Scott

Reprinted from the Financial Analysts Journal (January/February 2008):40–48.

Chapter 8 A Sustainable Spending Rate without Simulation 151
Moshe A. Milevsky and Chris Robinson

Reprinted from the Financial Analysts Journal (November/December 2005): 89–100.

Chapter 9 Asset Allocation without Unobservable Parameters 169
Michael Stutzer

Reprinted from the Financial Analysts Journal (September/October 2004):38–51.

Part II: Investment Management for Taxable Private Clients

Chapter 10 Investment Management for Taxable Private Investors 191
Jarrod Wilcox, CFA; Jeffrey E. Horvitz; and Dan diBartolomeo

Reprinted from The Research Foundation of CFA Institute (January 2006).

Chapter 11 Core/Satellite Strategies for the High-Net-Worth Investor 299
Clifford H. Quisenberry, CFA

Reprinted from CFA Institute Conference Proceedings Quarterly (December 2006):38–45.

Chapter 12 The Higher Equity Risk Premium Created by Taxation 311

Martin L. Leibowitz

Modified from the Financial Analysts Journal (September/October 2003):28–31.

Chapter 13 Tax Deferral and Tax-Loss Harvesting 317
Jeffrey E. Horvitz

Reprinted from CFA Institute Conference Proceedings: Wealth Management (October 2005):24–30.

Chapter 14 Tax Management, Loss Harvesting, and HIFO Accounting 327
Andrew L. Berkin and Jia Ye

Reprinted from the Financial Analysts Journal (July/August 2003):91–102.

Chapter 15 Investing with a Tax-Effi cient Eye 345
Robert N. Gordon

Reprinted from CFA Institute Conference Proceedings: Wealth Management (October 2005):31–40.

Chapter 16 Diversifying Concentrated Holdings 361
Scott D. Welch

Reprinted from AIMR Conference Proceedings: Investment Counseling for Private Clients III (August 2001):30–35.

Chapter 17 Hedging Low-Cost-Basis Stock 373
Robert N. Gordon

Reprinted from AIMR Conference Proceedings: Investment Counseling for Private Clients III (August 2001):36–43.

Part III: Tax-Efficient Wealth Accumulation

Chapter 18 Tax-Advantaged Savings Accounts and Tax-Efficient Wealth Accumulation 387
Stephen M. Horan, CFA

Reprinted from The Research Foundation of CFA Institute (June 2005).

Chapter 19 After-Tax Asset Allocation 475
William Reichenstein, CFA

Reprinted from the Financial Analysts Journal (July/August 2006):14–19.

Chapter 20 Withdrawal Location with Progressive Tax Rates 485
Stephen M. Horan, CFA

Reprinted from the Financial Analysts Journal (November/December 2006):77–87.

Part IV: After-Tax Performance Measurement

Chapter 21 After-Tax Performance Evaluation 507
James M. Poterba

Reprinted from AIMR Conference Proceedings: Investment Counseling for Private Clients II (August 2000):58–67.

Chapter 22 Taxable Benchmarks: The Complexity Increases 521
Lee N. Price, CFA

Reprinted from AIMR Conference Proceedings: Investment Counseling for Private Clients III (August 2001):54–64.

Chapter 23 Explaining After-Tax Mutual Fund Performance 535
James D. Peterson; Paul A. Pietranico, CFA; Mark W. Riepe, CFA; and Fran Xu, CFA

Reprinted from the Financial Analysts Journal (January/February 2002):75–86.

About the Contributors 553

Index 555