The Aspirational Investor
Merrill Lynch Wealth Management's Chief Investment Officer explains why goals, not markets, should be the primary focus of your investing plan—and provides a practical, creative approach for aligning your goals with your investment strategy.
Today, we all have the responsibility of sensible investing, but far too many of us are focused with the wrong goals: maximizing returns at any costs, finding the next big fund manager, or outperforming "the market." Regrettably, traditional portfolio theory and the big debates in finance have only provided investors only partial answers. What's needed, according to Ashvin B. Chhabra, is a framework that shifts investment strategy's focus away from portfolios and markets and toward individuals and the goals that really matter: things like avoiding financial crises, paying for education or retirement, and funding philanthropy and entrepreneurship.
Rather than reacting to the whims of the financial markets, the Aspirational Investor is a practical, innovative approach to wealth management based on key goals and careful risk allocation. Chhabra introduces his "Wealth Allocation Framework," which accommodates the three seemingly incompatible goals that must underpin every sound wealth management plan: financial security in the face of known and unknown risks, maintaining current living standards over time despite inflation, and pursuing aspirational wealth creation goals.
By simplifying our understanding of key asset classes and laying out a concise roadmap for identifying, prioritizing, and quantifying financial goals, Chhabra reveals some surprising facts about wealth creation, reinterprets the success formulas of investing greats like Warren Buffett, and bridges the gap between theory and practice. The Aspirational Investor places us on a road to more confident and fulfilled financial lives by raising the bar for what we should expect from our investment portfolios—and our financial advisors.
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