Cover -- Title Page -- Copyright Page -- Dedication -- Contents -- Preface -- Acknowledgments -- About the Authors -- CHAPTER 1 Why Do We Need Better Financial Advice? -- The Individual -- Organizational Influences -- The Rest of the Story -- CHAPTER 2 The Evidence Is Compelling -- Financial Planning -- Your Most Important Investment Decision -- Option Payoffs are Not Simple -- After-Tax Payoffs are Not Simple -- Our Primitive Brains and Monkey See, Monkey Do -- Others' Agendas and the Perils of the Ivory Tower -- CHAPTER 3 The Extended Balance Sheet Approach to Financial Planning -- The Simplest Model -- The Stochastic Dynamic Programming Alternative -- The Mental Accounting Alternative -- The Extended Balance Sheet -- A Financial Planning System -- CHAPTER 4 Properties of Mostly Efficient Markets -- Multi-Agent Emergent Behavior -- Why Security Returns are Difficult to Predict -- Markets Bubble and Crash -- Investment Implications of Market Characteristics -- CHAPTER 5 Growing Discretionary Wealth -- The Discretionary Wealth Approach -- Elements of the Approach -- Appropriate Markowitz Risk Aversion -- CHAPTER 6 Coping with Uncertain Knowledge -- Interpretation of Probability -- Bayesian Probability Fundamentals -- Resisting Forecasting Overconfidence -- Making Estimates More Robust to Extreme Observations -- Taking Context into Account -- Making Better Use of Information in Decisions -- CHAPTER 7 Controlling Investing Behavioral Biases -- Facing Up to Complexity -- Promoting Independent Thinking -- Controlling Organizational Biases -- CHAPTER 8 Tax Efficient Investing -- Context -- Taxes that Affect Investment Returns -- General Principles of After-Tax Investing -- Measurement of After-Tax Performance and Benchmarks -- CHAPTER 9 Matching Investment Vehicles to Needs -- Revisiting Risk Aversion -- Taxes Again -- Diversification.

Higher Moments -- Implementation -- CHAPTER 10 Active vs. Passive Strategies -- Pricing Efficiency and the Active-Passive Debate -- CHAPTER 11 Performance Measurement -- Relating Measurement to Purpose -- Spending Control -- Measurement for Individual Passive Investing -- Performance Reporting for Active Investors -- Delegating Your Investments Based on Measurements -- Measuring vs. Evaluating Performance -- CHAPTER 12 Organizational Investing -- Representative Investing Organizations -- Delegating Superior Investing Results -- Motivating Organizational Benefits -- CHAPTER 13 Financial Advice and Society -- Social Ideals and Financial Problem Symptoms -- Redesigning Society with Better Financial Advice -- And in Conclusion… -- APPENDIX A Traditional Asset Classes and Alternative Assets -- Asset Class Defined -- Common Stock Asset Classes -- Real Estate -- Alternative Assets -- APPENDIX B Bond Features, Yield Measures, and Risks -- Features of Bonds -- Yield Measures and their Limitations -- Call and Prepayment Risk -- Credit Risk -- APPENDIX C Probability Distributions Commonly Used in Investment Management -- Normal Distribution -- Student's t-Distribution -- Stable Distributions and Stable Paretian Distributions -- APPENDIX D Useful Financial Planning Formulas -- Working with Present Values -- Determining the Required Savings-to-Income Ratio -- Taking Initial Investments and Needed Retirement Income Reduction into Account -- Investment Return Mean and Variance -- Deriving an Estimate of Discretionary Wealth Growth Rate -- Estimating Appropriate Expected Return for Compounding -- References -- Index.