Weekend Reading for Financial Advisers: Fiscal Cliff, Behavioral Finance, and Poker

Categories: Behavioral Finance, Private Wealth Management
Weekend Reading

Happy 2013! What better way to start off the new year than with a handy reading list? Here are some great resources for financial advisers, in case you missed them:

Fiscal Cliff (Not)

Behavioral Finance


Ethics

Economic Theory and Poker

  • Modern Portfolio Theory is for Nitiots” looks at the failings of modern portfolio theory (MPT) through the lens of poker. A “nitiot,” in case you are wondering, is “the player who is so fearful of risk, he (or she) will make terrible decisions to avoid it — laboring under the mistaken assumption that volatility and risk are the same thing.” How does this relate to MPT? “The Nitiot’s central failing is also a central plank of Modern Portfolio Theory: The wrong-headed notion that volatility equates to risk.” (Mercenary Trader)

Investing

Annuities

  • In his article “How Safe are Annuities?” Joe Tomlinson, an actuary and financial planner, makes the point that many advisers don’t recommend annuities because of the possibility that insurance companies will run into financial difficulties. But, he notes, “annuities are the best way to mitigate longevity risk, which may pose a greater danger, and advisors can take steps to help protect clients from insurers’ financial problems.” The piece was published in August 2012 but recently caught my attention because it was one of the 10 most-read articles from Advisor Perspectives last year. (Advisor Perspectives)

Marketing/Practice Management

And Now For Something Completely Different


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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