Indore Stock：A new method of wealth management

Ashwen B. Chabra/Wen

Although money can't buy happiness, wealth can indeed bring us a sense of security and comfort. More importantly, it can create choices and opportunities.Regardless of your goal is to achieve wealth, or just to preserve wealth, whether investment is wise or not, it will have a significant impact on the quality of life of you and the people you love.

However, most investors, even those who are smart and successful in a certain field, lack a basic understanding of the financial market.This will cause them to make bad investment decisions.Most people do not realize that we are not enough for financial affairs, or we are just unwilling to acknowledge the negative impact of financial affairs on our interpersonal relationships and personal life.But such facts make the problem more complicated.

Many investors confirm that they have the limitations of themselves and hand over funds to professional consultants to take care of them.However, the process of commissioned professionals to manage funds itself is facing various risks.Most people do not know much about investing or not.After suffering major market disasters such as the large stock market in 2008, angry investors will fire their investment consultants and find another person to replace them.In the next period of market downturn, the same thing will be staged again.

The investment community has not reached a consensus.Despite the more than 60 years of debate and research, the academic community and the financial service industry are still divided into two major camps: Efficient Market Camp and Active Management Camp.The valid market camp advocates that most investment managers cannot run the market at all, especially after paying taxes and paying related fees, the solution they give is index investment; active management camps are extremely successful with Volon Buffett, which are extremely successful.The performance of investors is proved to induce investors to join their camp.

The investment results of ordinary investors are quite frustrating. The performance of their investment portfolios is not only inferior to the standard market benchmark, but also much worse than the personal fund they invest.We will explore this sad phenomenon in detail.

The exciting and relatively new field of behavioral finance emphasizes the role of psychology and emotions in investment.However, so far, research in this field has revealed only a long string of psychological deviations. It is these psychological deviations that guide many of us on the wrong path.However, the behavior finance does not provide much of these "errors" and difficult to correct.

At the same time, the news broadcasts of all -weather and many financial news websites means that even if they are occasionally browsed, they will have the views on every or large or small global event and their views on the financial market.Continuously change.The rich information and analysis content is for us to learn from, but sometimes it is confusing. They magnify the noise in the investment environment and add another obstacle to our wise financial decisions.

There is no doubt that investors lack tools for helping their successful investment.

Your financial consultant is likely to complicate the problem.If you meet regularly with professional financial advisors, your meeting is likely to be very vibrant because of various color charts. Financial consultants will tell in detail about mobile asset cake -like maps and different performance measurement methods.The focus of your attention may be the return on investment in the past few quarters or last year.Your conversation with financial consultants is likely to repeatedly focus on good investment, investment managers who have poor performance and may need to be fired, as well as changes that should be made based on the prediction of the investment environment in the next few years.

What are the problems with such a picture?Indore Stock

The problem is that for investment -available mobile assets (by the way, it may only account for only part of your entire net worth) and the attention of (short -term) investment performance, it will make the traditional Gu hiring two parties go with a set of wrong issues as the goal as the goal as the goal as the goal.The emphasis on the focus has become "how to improve my investment returns, or how to continue to win the market", not "how to have a certain degree of grasp to achieve my life goal."

In this book, I think the major debate in the financial field, especially the conflict between index investment and active management, is concentrated on a series of wrong choices.The market does not really care about you, so why do you spend all your time and energy on winning the market?You definitely don't want you to succeed depends on the future performance of the financial market.

So how do those so -called "errors" in investment behavior understand?Maybe they are not wrong at all.We will see that the two biggest errors mentioned in financial theory -concentration and leverage are the cornerstone of many entrepreneurs to accumulate a large number of personal wealth.Since smart and successful individuals are constantly violating decentralized investment, such as stable investment criteria, there are obviously more things to learn from.

This book provides a new wealth management method, one is not based on the market, but a method based on the realization of personal goals and cautious management risks. I call it a wealth configuration framework.This method starts from the following point of view: a truly comprehensive wealth management strategy must at the same time meet the dual needs of financial security and wealth creation. At the same time, it can also maintain your standard of living by bearing the quantitative financial market risks.The focus of this book is to define your personal goals, and then optimize your financial assets, human capital or profitability around these goals.

The traditional investment portfolio theory, known as the Modern Portfolio theory, is the theory of optimizing the risk and income of financial markets by building the best investment portfolio.And we need a new theory to transfer the focus from the investment portfolio and the market to personal life and achieve life goals.I call this more practical theory as the Objective Portfolio theory.

Inlealy, the method of driving this goal makes sense.The world of our lives no longer has full social security. Therefore, in order to pursue excess returns, all your net worth is exposed to the risk of financial markets, which is by no means a rational strategy to achieve an important goal of your life.Pension and setting of Defined-Benefit Plans seem to be dying, and the future of social security benefits is still confused.Company pensions with certain guarantees have been replaced by the 401K plan, and the latter has shifted the risks of funds exhausted by the company and the public sector to individuals.Traditional lifelong work no longer exists.In the era when medical insurance costs continued to rise, people's working years began to extend and their life span was prolonged.The reality is that for most people, personal financial assets are no longer supplementing pensions, but everything they must rely on life.

Today, all of us should have the heavy burden of investing wisely.Over time, your demand for investment portfolios will inevitably increaseLucknow Stock. No matter what the market is, you must maintain your own living standards, and your performance is likely to accompany you in your life (including a long retirement time).Unless you have been far away from the influence of the financial market fluctuations in some appropriate way, excessive fluctuations may make your investment strategy collapse.

However, management investment is not just to obtain financial security.Getting a lot of wealth or creating a long -lasting impact often needs to establish an ambitious dream goal while managing and reducing multiple risks.Whether it is founding a new enterprise, holding a stock under heavy warehouse, or investing in a well -known project, your investment portfolio should provide support for your ambition to pursue ambition, but also will not endanger your financial securityEssenceFor many people, especially those who have entrepreneurial tendencies, life without dreams is incomplete, or it is full of "dreams of dreams."

The design wealth configuration framework is to meet the three seemingly incompatible needs of each wealth management plan.

• In the face of known and unknown risks, ensure financial security needs.

• Maintain the needs of their own living standards when facing inflation and extension of life.

• Pursuing goals and realizing dreams, whether to create personal wealth, leave famous youth history, or leave a legacy.

In the first part of this book, I put forward full reasons for designing this new framework.In the "investor" part, I examined the role played by individuals.As mentioned earlier, when it comes to wise investment, the biggest enemy of investors is often themselves.Why is the market conditions rising or falling? The more people want to make up for the losses, the greater the lossKanpur Stock?Next, in the "market" part, I will explain the turbulent history of the financial market.Contrary to people's general views, even in the long period of time, especially in the most important personal life cycle, the financial market is often unstable.This helps to explain why it is only from the market and cannot provide you with appropriate investment strategies.Next, in this part of "Wealth", how to become very rich, I will give some surprising facts (for example, to achieve the accumulation of wealth by breaking the "rules" of investment).

In the next part of this book, I will answer an ancient question: "How much does I need to do all this?" I will provide some practical strategies to help you determine your financial goals and judge their priority.And quantify it.Next, I outline this wealth configuration framework and explain how it associates your priority matters with the current and future net worth, so that you can create an investment strategy to help you achieve your goals and dreamsEssenceIn the last part of this book, I will re -explain the strategies of the two investment masters. They are Valun Buffett, the value investor, and David Stanson, chief investment officer of the Yale University Donation Fund, who created the donation fund investment model (David Swensen).Through the perspective of the wealth configuration framework, their investment strategies have been examined, and I have given key insights on the advantages and disadvantages of the two methods, and provided experienced lessons for individual investors.

By examining the ambitious goals and the role of investment in our life and investment portfolios, I have concluded that my own conclusions.Although the modern investment portfolio theory ignores this, our dream does reflect the meaning of our lives and what is driving and inspiring us.

This book in your hand is a practical guide for new investment methods.If my work is not bad, then it will lead you to a more confident and fulfilling wealth management path.

(Author Ashwen B. Chabra is the chief investment officer of Euclidean Capital; this article is an introduction to the "Road to Freedom of Fortune")

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