The Chief Investment Officer of Merrill Lynch Wealth Management explains why goals, not markets, should be the primary focus of your investment strategy—and offers a practical, innovative framework for making smarter choices about aligning your goals to your investment strategy.
Today all of us bear the burden of investing wisely, but too many of us are preoccupied with the wrong priorities—increasing returns at all costs, finding the next star fund manager, or beating “the market.” Unfortunately conventional portfolio theory and the grand debates in finance have offered investors only incomplete solutions. What is needed, argues Ashvin B. Chhabra, is a framework that shifts the focus of investment strategy from portfolios and markets to individuals and the objectives that really matter: things like protecting against unexpected financial crises, paying for education or retirement, and financing philanthropy and entrepreneurship.
The Aspirational Investor is a practical, innovative approach to managing wealth based on key goals and the careful allocation of risks rather than responding to the whims of the financial markets. Chhabra introduces his “Wealth Allocation Framework,” which accommodates the three seemingly incompatible objectives that must underpin every sound wealth management plan: the need for financial security in the face of known and unknowable risks; the need to maintain current living standards over time despite inflation; and the need to pursue aspirational goals for wealth creation.
Chhabra reveals some surprising facts about wealth creation, reinterprets the success formulas of investing greats like Warren Buffett, and closes the gap between theory and practice by simplifying our understanding of key asset classes and laying out a concise roadmap for identifying, prioritizing, and quantifying financial goals. Raising the bar for what we should expect from our investment portfolios—and our financial advisors—The Aspirational Investor sets us on a path to more confident and fulfilling financial lives.
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About the Author
Ashvin B. Chhabra is the chief investment officer of Merrill Lynch Wealth Management, Bank of America. Merrill Lynch is one of the world's largest brokerage and wealth management firms, with over $2 trillion in client balances. Prior to his current position, he was chief investment officer at the Institute of Advanced Study in Princeton, New Jersey. He is widely recognized as one of the founders of goals-based wealth management and for his seminal work "Beyond Markowitz," which integrates modern portfolio theory with behavioral finance. Ashvin grew up in New Delhi and received his PhD in applied physics, in the field of chaos theory, from Yale University, where he also met his Italian-born wife, Daniela Bonafede-Chhabra. He resides in Princeton with his wife, their daughter, Maya, and son, Sasha.