Download or read book Safety First Portfolio Insurance written by William N. Goetzmann and published by . This book was released on 2011 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, we show how a dynamic insurance program can be implemented within a mean-variance framework. The approach combines elements of the single period safety first idea suggested by Telser and developed by Leibowitz with multiperiod insurance strategies like CPPI and TIPP. The insurance program allows the user to set a probability of hitting a specified floor or target and also allows for changing risk attitudes through time. When the insurance strategy is tested on historical data, the insured portfolio achieves high long-term returns while mostly avoiding long bear markets. In order to understand how the insurance strategy might perform in the future, we simulate returns of the stock market and compare the insurance strategy to buy and hold strategies. An additional benefit of the safety first approach is that it specifies a strategy for underfunded portfolios as well as overfunded portfolios.

Download or read book Safety First Retirement Planning written by Wade Donald Pfau and published by Retirement Researcher Guid. This book was released on 2019-10 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt: Two fundamentally different philosophies for retirement income planning, which I call probability-based and safety-first, diverge on the critical issue of where a retirement plan is best served: in the risk/reward trade-offs of a diversified and aggressive investment portfolio that relies primarily on the stock market, or in the contractual protections of insurance products that integrate the power of risk pooling and actuarial science alongside investments. The probability-based approach is generally better understood by the public. It advocates using an aggressive investment portfolio with a large allocation to stocks to meet retirement goals. My earlier book How Much Can I Spend in Retirement? A Guide to Investment-Based Retirement Strategies provides an extensive investigation of probability-based approaches. But this investments-only attitude is not the optimal way to build a retirement income plan. There are pitfalls in retirement that we are less familiar with during the accumulation years. The nature of risk changes. Longevity risk is the possibility of living longer than planned, which could mean not having resources to maintain the retiree's standard of living. And once retirement distributions begin, market downturns in the early years can disproportionately harm retirement sustainability. This is sequence-of-returns risk, and it acts to amplify the impacts of market volatility in retirement. Traditional wealth management is not equipped to handle these new risks in a fulfilling way. More assets are required to cover spending goals over a possibly costly retirement triggered by a long life and poor market returns. And yet, there is no assurance that assets will be sufficient. For retirees who are worried about outliving their wealth, probability-based strategies can become excessively conservative and stressful. This book focuses on the other option: safety-first retirement planning. Safety-first advocates support a more bifurcated approach to building retirement income plans that integrates insurance with investments, providing lifetime income protections to cover spending. With risk pooling through insurance, retirees effectively pay an insurance premium that will provide a benefit to support spending in otherwise costly retirements that could deplete an unprotected investment portfolio. Insurance companies can pool sequence and longevity risks across a large base of retirees, much like a traditional defined-benefit company pension plan or Social Security, allowing for retirement spending that is more closely aligned with averages. When bonds are replaced with insurance-based risk pooling assets, retirees can improve the odds of meeting their spending goals while also supporting more legacy at the end of life, especially in the event of a longer-than-average retirement. We walk through this thought process and logic in steps, investigating three basic ways to fund a retirement spending goal: with bonds, with a diversified investment portfolio, and with risk pooling through annuities and life insurance. We consider the potential role for different types of annuities including simple income annuities, variable annuities, and fixed index annuities. I explain how different annuities work and how readers can evaluate them. We also examine the potential for whole life insurance to contribute to a retirement income plan. When we properly consider the range of risks introduced after retirement, I conclude that the integrated strategies preferred by safety-first advocates support more efficient retirement outcomes. Safety-first retirement planning helps to meet financial goals with less worry. This book explains how to evaluate different insurance options and implement these solutions into an integrated retirement plan.

Download or read book Safe Haven written by Mark Spitznagel and published by John Wiley & Sons. This book was released on 2023-10-10 with total page 247 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is a safe haven? What role should they play in an investment portfolio? Do we use them only to seek shelter until the passing of financial storms? Or are they something more? Contrary to everything we know from modern financial theory, can higher returns actually come as a result of lowering risk? In Safe Haven, hedge fund manager Mark Spitznagel—one of the top practitioners of safe haven investing and portfolio risk mitigation in the world—answers these questions and more. Investors who heed the message in this book will never look at risk mitigation the same way again.

Download or read book Risk Less and Prosper written by Zvi Bodie and published by John Wiley & Sons. This book was released on 2011-12-27 with total page 227 pages. Available in PDF, EPUB and Kindle. Book excerpt: A practical guide to getting personal investing right Somewhere along the way, something has gone very wrong with the way individuals save and invest. Too often, households are drawn in by promotional suggestions masquerading as impartial investment advice. Consumers get saddled with more risk than they realize. Authors Zvi Bodie and Rachelle Taqqu understand the dilemma that today's investors face, and with Risk Less and Prosper they will help you find your financial footing. Written in an accessible style, this practical guide skillfully explains why personal investing is all about you—your goals, your values and your career path. It shows how to understand investment risk and choose the particular blend of risk and safety that is right for you. And it lays out several simple yet powerful ways for small investors to cast a reliable safety net to achieve their financial goals and truly prosper. Coauthors Bodie and Taqqu challenge the myth that all investments require risk, then highlight some important risks that families often disregard when deciding where to put their money. Later, they connect the dots between investment and investor, showing us all how to grasp our own investment risk profiles and how we may use these insights to make more fitting investment choices. Outlines a straightforward way to invest by aligning your investments with your goals and the risk levels you can bear Provides basic investment abc's for readers who are otherwise literate Lays out a simple, actionable plan for achieving your goals Explains the role of risk-free assets and investment insurance in assuring that you reach your most essential goals Contrary to popular belief, investing doesn't have to be complicated. You can build wealth without taking great risks. Risk Less and Prosper will show you how to make investment decisions that will make your financial life less stressful and more profitable.

Download or read book Portfolio Optimization and Performance Analysis written by Jean-Luc Prigent and published by CRC Press. This book was released on 2007-05-07 with total page 451 pages. Available in PDF, EPUB and Kindle. Book excerpt: In answer to the intense development of new financial products and the increasing complexity of portfolio management theory, Portfolio Optimization and Performance Analysis offers a solid grounding in modern portfolio theory. The book presents both standard and novel results on the axiomatics of the individual choice in an uncertain framework, cont

Download or read book Portfolio Risk Analysis written by Gregory Connor and published by Princeton University Press. This book was released on 2010-03-15 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: Portfolio risk forecasting has been and continues to be an active research field for both academics and practitioners. Almost all institutional investment management firms use quantitative models for their portfolio forecasting, and researchers have explored models' econometric foundations, relative performance, and implications for capital market behavior and asset pricing equilibrium. Portfolio Risk Analysis provides an insightful and thorough overview of financial risk modeling, with an emphasis on practical applications, empirical reality, and historical perspective. Beginning with mean-variance analysis and the capital asset pricing model, the authors give a comprehensive and detailed account of factor models, which are the key to successful risk analysis in every economic climate. Topics range from the relative merits of fundamental, statistical, and macroeconomic models, to GARCH and other time series models, to the properties of the VIX volatility index. The book covers both mainstream and alternative asset classes, and includes in-depth treatments of model integration and evaluation. Credit and liquidity risk and the uncertainty of extreme events are examined in an intuitive and rigorous way. An extensive literature review accompanies each topic. The authors complement basic modeling techniques with references to applications, empirical studies, and advanced mathematical texts. This book is essential for financial practitioners, researchers, scholars, and students who want to understand the nature of financial markets or work toward improving them.

Download or read book Operationalizing Safety First Portfolio Selection Using Extreme Value Theory written by Dennis W. Jansen and published by . This book was released on 1995 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Asset Allocation Considerations for Pension Insurance Funds written by Christian Hertrich and published by Springer Science & Business Media. This book was released on 2013-04-16 with total page 405 pages. Available in PDF, EPUB and Kindle. Book excerpt: ​The central research objective of the dissertation is to assess the suitability of Social Responsible Investments (SRIs) as well as alternative investments for the strategic asset allocation of German Pension Insurance Funds (Pensionskassen). Using a Vector Error Correction model, we estimate the data generating process of the underlying input variables. A bootstrap simulation allows generating future return paths of the underlying portfolios. These return distributions will subsequently be used as input for different asset allocation strategies.The empirical results of our research study offer valuable conclusions: (1) SRI-structured portfolios consistently perform better than conventional portfolios, (2) including alternative investments has a beneficial effect on the risk-return distribution and (3) derivative overlay structures mitigate downside risk exposure without impacting average fund performance. In terms of alternative allocation models, (1) high-equity portfolios lead to an increase in return volatility without sufficiently compensating investors with higher returns, (2) hedging against price increases by engineering a portfolio with inflation-suitable assets yields mixed results, (3) a portfolio composition that combines derivative overlay strategies for both equities and corporate bonds and uses SRI-screened assets as underlying generates the best results.

Download or read book Fail Safe Investing written by Harry Browne and published by Macmillan + ORM. This book was released on 1999-09-30 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do you worry that you're not paying enough attention to your investments? Do you feel left out when you hear about the clever things other investors seem to be doing? Relax. You don't have to become an investment genius to protect your savings. Distilling the wisdom of his thirty years' experience into lessons that can be applied in thirty minutes, Harry Browne shows you what you need to know to make your savings and investments safe and profitable, no matter what the economy and the investment markets do. There are no secret trading systems here, no jargon to learn. Instead, Harry Browne teaches you in simple terms to, among other things: -Build your wealth on your career -Make your own decisions -Build a bulletproof portfolio for protection -Take advantage of tax-reduction plans -Enjoy yourself with a budget for pleasure

Download or read book Worry free Investing written by Zvi Bodie and published by FT Press. This book was released on 2003 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors teach readers about the new rules of investing, which include investing with inflation-protected bonds, reaching retirement goals, and investing safely for college.

Download or read book Safety First written by Toni Ahnert and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose a safety demand view of banking. Households have a structural preference for safety and heterogeneous self-insurance options, and choose a portfolio of productive and directly control personal assets. Private intermediaries arise endogenously to limit inefficient self insurance, as households with high self-insurance returns invest in bank equity while households with low self-insurance returns hold debt. The conflict over interim risk choices is solved by demandable debt, forcing early liquidation. Our theory rationalizes puzzling empirical findings in household finance, such as large dfferences in risky returns across the wealth distribution. We show that public provision of safety can crowd in the private provision of safety, as safe public debt requires taxing safe income. In contrast, deposit insurance can boost both intermediation and productive investment.

Download or read book Guide to Investment Strategy written by Peter Stanyer and published by John Wiley & Sons. This book was released on 2011-09-26 with total page 306 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first edition of The Economist Guide to Investment Strategy explained the fundamentals of investment risk, how to put together "keep-it-simple" investment strategies, and the need to guard against our own behavior leading to dreadful investment mistakes. The global crisis that erupted in 2008 exposed the flaws in many more complicated investment strategies. The second edition starts with a new section on financial fraud and how investors can help to protect themselves against this "hearty perennial." It also includes a new section on risk profiling and discusses the role of risk tolerance questionnaires. In Chapter 3 data are provided pointing to underperformance of equities between 1978 and 2008. Against this background, there is a new Chapter 4—"Which should we do: buy-and-hold or time markets?" Chapter 5, which discusses the design of short-term and long-term strategies, includes a new section—"How safe is cash?"—and the discussion of bond ladders is extended to reflect issues of bond selection in the light of corporate credit risk and the financial difficulties of some US municipal authorities. Part 2 has been updated extensively to reflect developments in the past four years and the impact of the financial crisis on credit instruments, hedge funds, private equity, and real estate. The book concludes with a new chapter on investing in art and collectibles. It explores the argument that art prices "float aimlessly," discusses financial investment in art, and provides some reasons for expecting that a portfolio of art might perform well in the future.

Download or read book Stochastic Programming Problems with Probability and Quantile Functions written by Andreĭ Ivanovich Kibzun and published by John Wiley & Sons. This book was released on 1996-08-06 with total page 330 pages. Available in PDF, EPUB and Kindle. Book excerpt: The concept of a system as an entity in its own right has emerged with increasing force in the past few decades in, for example, the areas of electrical and control engineering, economics, ecology, urban structures, automaton theory, operational research and industry. The more definite concept of a large-scale system is implicit in these applications, but is particularly evident in fields such as the study of communication networks, computer networks and neural networks. The Wiley-Interscience Series in Systems and Optimization has been established to serve the needs of researchers in these rapidly developing fields. It is intended for works concerned with developments in quantitative systems theory, applications of such theory in areas of interest, or associated methodology. Of related interest Stochastic Programming Peter Kall, University of Zurich, Switzerland and Stein W. Wallace, University of Trondheim, Norway Stochastic Programming is the first textbook to provide a thorough and self-contained introduction to the subject. Carefully written to cover all necessary background material from both linear and non-linear programming, as well as probability theory, the book draws together the methods and techniques previously described in disparate sources. After introducing the terms and modelling issues when randomness is introduced in a deterministic mathematical programming model, the authors cover decision trees and dynamic programming, recourse problems, probabilistic constraints, preprocessing and network problems. Exercises are provided at the end of each chapter. Throughout, the emphasis is on the appropriate use of the techniques, rather than on the underlying mathematical proofs and theories, making the book ideal for researchers and students in mathematical programming and operations research who wish to develop their skills in stochastic programming.

Download or read book The Bogleheads Guide to the Three Fund Portfolio written by Taylor Larimore and published by John Wiley & Sons. This book was released on 2018-06-01 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: Twenty benefits from the three-fund total market index portfolio. The Bogleheads’ Guide to The Three-Fund Portfolio describes the most popular portfolio on the Bogleheads forum. This all-indexed portfolio contains over 15,000 worldwide securities, in just three easily-managed funds, that has outperformed the vast majority of both professional and amateur investors. If you are a new investor, or an experienced investor who wants to simplify and improve your portfolio, The Bogleheads’ Guide to The Three-Fund Portfolio is a short, easy-to-read guide to show you how.

Download or read book Risk Analysis and Portfolio Modelling written by Elisa Luciano and published by MDPI. This book was released on 2019-10-16 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Risk Measurement is a challenging task, because both the types of risk and the techniques evolve very quickly. This book collects a number of novel contributions to the measurement of financial risk, which address either non-fully explored risks or risk takers, and does so in a wide variety of empirical contexts.

Download or read book How to Invest in Structured Products written by Andreas Bluemke and published by John Wiley & Sons. This book was released on 2009-09-15 with total page 406 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is essential in understanding, investing and risk managing the holy grail of investments - structured products. The book begins by introducing structured products by way of a basic guide so that readers will be able to understand a payoff graphic, read a termsheet or assess a payoff formula, before moving on to the key asset classes and their peculiarities. Readers will then move on to the more advanced subjects such as structured products construction and behaviour during their lifetime. It also explains how to avoid important pitfalls in products across all asset classes, pitfalls that have led to huge losses over recent years, including detailed coverage of counterparty risk, the fall of Lehman Brothers and other key aspects of the financial crisis related to structured products. The second part of the book presents an original approach to implementing structured products in a portfolio. Key features include: A comprehensive list of factors an investor needs to take into consideration before investing. This makes it a great help to any buyer of structured products; Unbiased advice on product investments across several asset classes: equities, fixed income, foreign exchange and commodities; Guidance on how to implement structured products in a portfolio context; A comprehensive questionnaire that will help investors to define their own investment preferences, allowing for a greater precision when facing investment decisions; An original approach determining the typical distribution of returns for major product types, essential for product classification and optimal portfolio implementation purposes; Written in a fresh, clear and understandable style, with many figures illustrating the products and very little mathematics. This book will enable you to better comprehend the use of structured products in everyday banking, quickly analyzing a product, assessing which of your clients it suits, and recognizing its major pitfalls. You will be able to see the added value versus the cost of a product and if the payoff is compatible with the market expectations.

Download or read book Alternative Investments A Primer for Investment Professionals written by Donald R. Chambers and published by CFA Institute Research Foundation. This book was released on 2018 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt: Alternative Investments: A Primer for Investment Professionals provides an overview of alternative investments for institutional asset allocators and other overseers of portfolios containing both traditional and alternative assets. It is designed for those with substantial experience regarding traditional investments in stocks and bonds but limited familiarity regarding alternative assets, alternative strategies, and alternative portfolio management. The primer categorizes alternative assets into four groups: hedge funds, real assets, private equity, and structured products/derivatives. Real assets include vacant land, farmland, timber, infrastructure, intellectual property, commodities, and private real estate. For each group, the primer provides essential information about the characteristics, challenges, and purposes of these institutional-quality alternative assets in the context of a well-diversified institutional portfolio. Other topics addressed by this primer include tail risk, due diligence of the investment process and operations, measurement and management of risks and returns, setting return expectations, and portfolio construction. The primer concludes with a chapter on the case for investing in alternatives.