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The Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors, + Website

Book Description

Indispensable advice for building a lasting financial legacy

Building wealth is hard to do, but maintaining that wealth across generations is even more challenging. In The Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors + Website, wealth advice expert Gregory Curtis reveals the investment secrets of the world's wealthiest families, so that financial planners, fund managers, and wealthy individuals everywhere can follow in their footsteps. Outlining the best practices for preserving and growing wealth, the book details exactly how to build a lasting financial legacy in the face of taxes, inflation, investment costs, and the conflicts of interest that are endemic to the financial advisory business.

Wealthy families are at the very heart of America's exceptionalism, of the vigor, resilience, and creativity that have made the U.S. the most successful nation in history. The Stewardship of Wealth's discusses the crucial role private wealth continues to play in America's remarkable economic and cultural success and the issues wealthy families and their advisors face, presenting a step-by-step guide to better managing liquid wealth.

  • Reveals the wealth management strategies employed by America's wealthiest families and their financial managers

  • Explores the challenges to ensuring that money stays in the family, from portfolio design to manager selection to monitoring investment performance, and much more

  • Details the essential steps for ensuring a lasting financial legacy

An examination of the key issues involved in managing private wealth, especially for affluent families, The Stewardship of Wealth + Website is the ultimate guide to building a financial legacy that will last.

Note: The ebook version does not provide access to the companion files.

Table of Contents

  1. Cover
  2. Series Page
  3. Title Page
  4. Copyright
  5. Dedication
  6. Preface
  7. Acknowledgements
  8. Part One: The Importance of Private Capital
    1. Chapter 1: Wealth in America
      1. Democracy and Capitalism
      2. Capitalism and Its Contradictions
      3. Providential Societies
      4. Risk and Strength
      5. America and Decline
      6. On China
      7. Addressing the Declinists
      8. Conclusion: American Distinctiveness and Private Wealth
      9. Notes
    2. Chapter 2: Creative Capital
      1. A (Brief) Moral History of Capitalism
      2. The Ancients
      3. Moral Arguments for Capitalism
      4. Creative Capital in America
      5. Higher Education: The Case of St. John's College
      6. Politics: The Conservative Resurgence
      7. New Business Ideas: Venture Capital in America
      8. Creative Capital and Vibrant Societies
      9. Why Do Creative Capitalists Persist?
      10. The Indispensable Nation
      11. Conclusion: Underdogs and Bullies
      12. Notes
  9. Part Two: The Stewardship of Wealth
    1. Chapter 3: Are We Living in a Permanent Financial Crisis?
      1. The End of History (Again)
      2. A Permanent Financial Crisis?
      3. The Cause of the Crisis Matters
      4. The Industrial Revolution and Its Aftermath
      5. The Great (and Strange) Experiment
      6. Seize the Means of Production!
      7. The Power to Tax Is the Power to Destroy—Societies
      8. “Borrowing … the Disease Is Incurable”
      9. Now What?
      10. But, First, a Note about Germany
      11. Investing Capital in a (Very) Uncertain World
      12. Conclusion: A World At Risk
      13. Notes
    2. Chapter 4: Risk
      1. Families and Investment Risk
      2. The Law of Supply and Demand (Again)
      3. Idiosyncratic Ideas about Risk
      4. Real Risks: Those Embedded in the Process of Investing
      5. Variance Drain
      6. Behavioral Finance: Are We Hard-Wired for Failure?
      7. Edith and the Headwinds She Faces
      8. What Should Edith Do?
      9. Conclusion: Preserving Wealth Is Hard Slogging
      10. Notes
    3. Chapter 5: The Collapse of Ethical Behavior
      1. What Caused the Crisis?
      2. An Unsavory Rehash of the Ethical Failures
      3. How Scandal Became Crisis
      4. Why Such an Ethical Swamp?
      5. Where Do We Go from Here?
      6. Conclusion: Fixing the Industry
      7. Notes
    4. Chapter 6: Finding the Right Advisor
      1. Open Architecture as a Disruptive Business Model in the Advisory World
      2. The Outsourced CIO Model
      3. Finding the Right Advisor for Your Family
      4. Conclusion: Focusing On a Few Key Variables
      5. Notes
    5. Chapter 7: Making Family Investment Decisions
      1. The Family Investment Committee Today
      2. Attempts to Deal with the Problem
      3. The Family Investment Committee, Tomorrow
      4. Opportunity Costs: Prudence versus Returns
      5. Conclusion: Focusing On What Families Do Best
      6. Notes
    6. Chapter 8: Trusts
      1. Open-Architecture Trusts
      2. A Brief, Unconventional (but Wickedly Accurate) History of the Common-Law Trust from the Client's Perspective
      3. Down with the Bundled Trust! Up with the Open-Architecture Trust!
      4. Private Trust Companies
      5. Total Return Trusts
      6. Conclusion: Let's Get Revolutionary
      7. Notes
  10. Part Three: The Rich Get Richer
    1. Chapter 9: Designing Taxable Investment Portfolios
      1. The Markowitz Revolution
      2. Problems with Mean Variance Optimization
      3. Best Practices in Designing Investment Portfolios for Families
      4. Traditional Asset Allocation Modeling
      5. Modern Asset Allocation Modeling
      6. Satisfying Portfolio Claims Prudently
      7. Conclusion: Art versus Science
      8. Notes
    2. Chapter 10: Adding Value to Family Investment Portfolios
      1. Moving from the Current Strategy to the New Strategy
      2. Adding Value through Manager Selection
      3. Adding Value by Tactically Repositioning the Portfolio
      4. Adding Value through Opportunistic Investments
      5. Adding Value through Monitoring and Rebalancing
      6. Conclusion: We Need All The Value-Add We Can Get
      7. Notes
    3. Chapter 11: Investing in U.S. and Non-U.S. Equities
      1. U.S. Large- and Mid-Capitalization Stocks
      2. U.S. Small-Capitalization Stocks
      3. International Developed Country Stocks
      4. Emerging and Frontier Markets
      5. Conclusion: Equity Securities Are At the Core of Most Portfolios
      6. Notes
    4. Chapter 12: Investing Globally
      1. Why Go Global?
      2. Why Stay Home?
      3. Global Investing in the Real World (or, Maybe, Real Investing in a Global World)
      4. Conclusion: Think Globally, Act Locally
      5. Notes
    5. Chapter 13: Investing in Real Assets
      1. Real Estate
      2. Oil and Gas
      3. Commodities
      4. Conclusion: The Use and Misuse of Real Asset Exposure
      5. Notes
    6. Chapter 14: Investing in Fixed Income
      1. Mistakes Bond Investors Make
      2. Employing Best Practices in Building Bond Portfolios
      3. Managing Cash
      4. Conclusion: Fixed Income Is Underappreciated
      5. Notes
    7. Chapter 15: Investing in Hedge Funds
      1. What Is a Hedge Fund?
      2. Types of Hedge Funds
      3. Challenges for Hedge Fund Investors
      4. Building a First-Rate Hedge Fund Portfolio
      5. Conclusion: Should Anyone but Yale Invest in Hedge Funds?
      6. Notes
    8. Chapter 16: Investing in Private Equity
      1. Why Invest in PE?
      2. Persistence of Returns
      3. The Importance of Diversification
      4. Private Equity Returns
      5. The Return Characteristics of PE Investments
      6. Gaining Exposure to Private Equity
      7. PE Funds of Funds
      8. A Global Asset Class
      9. Illiquidity and the J-Curve Effect
      10. Ramping Up to Your Target Allocation
      11. Waterfall Analysis
      12. Secondary PE Investing
      13. The Evolution of Secondary Investing
      14. Secondary Investing Strategies
      15. Identifying High-Quality Secondary Funds
      16. Conclusion: The Ultimate Aspirational Asset
      17. Notes
    9. Chapter 17: Working with Money Managers
      1. The Business of Money Management
      2. Traditional Managers
      3. Alternative Managers
      4. Conclusion: At Least Managers Are Interesting
      5. Notes
    10. Chapter 18: Managing Investment-Related Taxes
      1. Designing Portfolios from an After-Tax Perspective
      2. Asset Location
      3. Asset Class Strategies
      4. Tax-Aware Managers
      5. Harvesting Losses
      6. Conclusion: You Can't Eat Gross Returns
      7. Notes
    11. Chapter 19: Asset Location and Implementation
      1. Asset Location Issues
      2. Implementation Issues
      3. Conclusion: It's Not Just a Technical Issue
      4. Notes
    12. Chapter 20: Monitoring and Rebalancing Taxable Portfolios
      1. Performance Monitoring
      2. Rebalancing Taxable Portfolios
      3. Conclusion: Monitoring and Rebalancing Are Stewardship Issues
      4. Notes
    13. Chapter 21: Investment Policy Statements
      1. The Investment Policy Statement
      2. Spending Policy Statements
      3. Cash Guidelines
      4. Manager Guidelines
      5. The Investment Committee Policy Manual
      6. Letters to the Family
      7. Conclusion: Don't Skimp on Documenting Your Decisionmaking
    14. Chapter 22: Miscellaneous Challenges for Private Investors
      1. Asset Custody
      2. Concentrated Security Positions
      3. Establishing a Family Office
      4. Family Investment Partnerships
      5. Philanthropy
      6. Conclusion: There Are Challenges Everywhere We Look
      7. Notes
  11. Afterword: On Happiness
    1. Stereotypes of the Rich
    2. The Rich and the “Faux Rich”
    3. The Real Way the Rich Are Different
    4. Children and the Wealthy
    5. Marriage and the Wealthy
    6. Work and the Wealthy
    7. Failed Stewardship and Family Unhappiness
    8. Wealth and Happiness
    9. Notes
  12. About the Companion Website
  13. About the Author
  14. Index