Personal Benchmark: Integrating Behavioral Finance and Investment Management -- Contents -- Preface -- Introduction -- Part 1: Why Do We Need to Look at Investing Differently? -- Chapter 1: Freedom in the Market and Advisor Responsibility -- The Financial Markets -- The Purpose of the Securities Industry -- Real Wins . . . and Losses -- The Rot in Denmark -- What We've Been Up to as Advisors -- What Investors Really Want and Need -- Help Me Resolve My Conflicts -- Help Me Achieve My Personal Goals -- Help Me Increase My Purchasing Power -- Help Me Weather Volatility -- Now Explain It to Me Like I'm a Four-Year-Old -- A New Investment Advice Delivery System -- Brinker Capital and Personal Benchmark -- A History of Innovation -- The Personal Benchmark Solution -- The Case of Jim and Jane Dodd -- Creating the Proposal -- Presenting the Proposal -- Reporting Performance -- Summary -- References -- Chapter 2: Investor Emotions and Financial Decisions -- The Origins and Evolution of Behavioral Finance -- Early Writings -- Three Phases of Evolution -- The Next Evolution in Behavioral Finance -- The Myths of Efficiency and Rationality -- This Time, It's Different -- Avoidance of Ambiguity -- A Definition and Framework for Behavioral Finance -- The Psychology of Simplicity -- Selective Recall through Heuristics and Emotional Salience -- Framing and Mental Accounting -- Money Illusion -- Choosing Simplicity -- The Psychology of Safety -- Herd Behavior -- Emotional Decision-Making -- Gut Feeling -- Managing Emotion -- The Psychology of Surety -- Desperately Seeking Experts -- Serenity. Now! -- Summary -- References -- Chapter 3: Risk, This Time It's Personal -- Fallacy 1: Risk and Return Are Systematically Correlated -- Behavioral Mythbuster #1-1: We Don't Want Skin in the Game -- Behavioral Mythbuster #1-2: Volatility is a Heartless Beast.

Behavioral Mythbuster #1-3: Can't Buy Me Love (or a Return, It Turns Out) -- Fallacy 2: Investors Have a Single, Static Level of Risk Tolerance -- Behavioral Mythbuster #2-1: Our Risk Tolerance Is A-Changing -- Behavioral Mythbuster #2-2: We Have Multiple, Simultaneous Risk Preferences -- Fallacy 3: One Man's Risk Is Another Man's Reasonable Probability -- Behavioral Mythbuster #3-1: It's Not the Bogeyman, It's Just Volatility-Based Risk -- Behavioral Mythbuster #3-2: Okay, This is the Bogeyman-Variance Drain and Risk -- Behavioral Mythbuster #3-3: Abandon Hope, All Ye Who Focus on Volatility-Based Notions of Risk -- Behavioral Risk and You -- Summary -- References -- Part 2: What Is the Personal Benchmark Approach? -- Chapter 4: Brinker Capital's Multi-Asset Class Investment Philosophy -- A Brief History of Investing -- Equity Investing Redux -- Modern Portfolio Theory -- Diversification and the Rise of Multi-Asset Class Investing -- Multi-Asset Classifications -- Our Multi-Asset Class Investment Philosophy -- Applying Our Philosophy -- Our Six Asset Classes -- Domestic Equity -- International Equity -- Fixed Income -- Absolute Return -- Real Assets -- Private Equity -- Asset Class Summary -- Application Process for Multi-Asset Class Theory -- Investor Risk Tolerance -- Neutral Asset Class Weightings and Ranges -- Neutral Weight Models -- Implementing Our Philosophy -- Develop Asset Class and Sub-Asset Class Expectations -- Sentiment -- Valuation FIGURE 4.7 Investor Sentiment (Bulls - Bears) 40 30 20 10 0 -10 -20 -30 -40 Apr '04 Source: FactSet and Brinker Capital, Inc. Chart represents 4-week moving average. For illustrative purposes only. B r i n k e r C -- Technicals -- Macroeconomic Environment -- Apply Mean-Variance Analysis and Other Tools -- Strategy Selection -- Selecting a Passive or Active Management Strategy -- Selecting an Active Manager.

Themes and Opportunities -- Summary -- References -- Chapter 5: The Power of Buckets -- Intentional Framing -- Framing with Purpose -- Mental Accounting for Increased Rationality -- Goals-Based Mental Accounts: A Case Study -- Summary -- References -- Chapter 6: Selection of an Active Investment Manager -- Passive versus Active Management -- The Successful Investment Firm -- The Successful Investment Manager -- An Effective Investment Management Process -- Monitoring and Assessing Performance -- Benchmark Comparisons -- Volatility, Efficiency, and Rates of Return -- Caveats of Quantitative Measures -- When to Terminate an Investment Manager -- A Look at Brinker Capital's Performance -- Summary -- References -- Part 3: How Can We Execute a Purpose-Driven Investment Strategy? -- Chapter 7: Using a Goals-Based Approach -- The Allure of Determinism in Economics and Psychology -- The Basics -- The Upshot -- The Fine Print -- Parallels in Psychology -- The Economy of One -- Our Inner Demons: A Field Guide -- Money Stresses Me Out -- I Hate Numbers -- I Can't Talk About That! -- I Want It NOW! -- Let Your "Why" Teach You "How" -- Summary -- References -- Chapter 8: Pursuing Your Personal Benchmark -- The Difference a Frame Makes -- Limitations in Our Decision Making -- The Joneses, Jealousy, and Missteps -- You Win, I Lose -- I Win, I'm at Par -- Keeping Up to Fall Behind -- The Anatomy of Better Decisions -- Avoiding Financial Inhibition and Overconfidence -- Avoiding Advisors Who Revere the Market Benchmark -- Going Your Own Way -- Summary -- References -- Chapter 9: Providing an Easy-to-Understand Explanation -- Your Best Investment -- Once More, with Feeling -- We're Not Dealing with Marshmallows Anymore -- We Haven't Got Time for the Pain -- Changing the Conversation -- Staying Power -- A Different Kind of Bucket List -- An Offer They Cannot Refuse.

The Brinker Capital Personal Benchmark Solution -- Six Asset Classes -- Mental Accounting and Buckets -- Now Sit Back, Relax, and Enjoy the Ride -- Persuasive Phrases -- Summary -- References -- Chapter 10: Leveraging a Scalable Offering for Investors and Advisors -- Using Personal Benchmark -- Beginning the Process -- Accessing the Investor's Portfolio -- Viewing and Creating the Investor's Personal Benchmark -- Reviewing the Investor's Portfolio Investment Strategy -- Reviewing the Investor's Documents and Proposal -- Implementing the Strategy and Monitoring Investor Performance -- Reaping Benefits for Advisors -- Summary -- Conclusion -- The Centrality of Purpose -- Finding Meaning in the Mundane -- References -- About the Authors -- About the Companion Website -- Index -- End User License Agreement.