The Aspirational Investor: Taming the Markets to Achieve Your Life's Goals Hardcover – Illustrated, 2 Jun. 2015

To what does the title of this book refer? As Ashvin Chhabra explains, an investor's financial decisions should be in response to this question: "How can I achieve my life goals with some degree of certainty?" Meanwhile, sufficient ROI is best viewed as a means rather than an ultimate objective. As he explains, "In this book, I will argue that the grand debates in finance, particularly the c lash between indexing and active management, are focused on a series of false choices. If the markets don't really care about you, as they surely do not, why should you spend all your time and effort trying to beat them? You certainly do not want the great successes of your life to be dependent on the future performance of financial markets."OK. Now what? Chhabra introduces the Wealth Allocation Framework (WAF), an approach that is designed to accumulate "the three seemingly incompatible objectives that should underpin every wealth management plan. The first is the need for financial security in the face of known and unknowable risks. The second is the need to maintain your living standard in the face of inflation and longevity. Third, but not last, is the need to pursue aspirational goals, be it for personal wealth creation, to create positive impact, or to leave a legacy." Chhabra provides an abundance of information, insights, and counsel by which to explain HOW.Chhabra urges investors and potential investors such as I to shift focus from market considerations to our own short-term, mid-term, and (especially) long-term priorities and accommodate them an appropriate wealth accumulation and management plan such as WAF. By exploring in the book the investment strategies of successful funds such as the Yale and Harvard endowments, comparing/contrasting them with other investment models, he shows how each investor needs their own strategy for approaching the market to account for their needs.These are among the dozens of passages of greatest interest and value to me, also listed to suggest the scope of his coverage:o Active investment management and market debate (Pages 2-3 and 13-18)o Wealth Allocation Framework and seven-step process (4-5 and 122-137)o Investors (9-27)o Basics of modern portfolio theory (13-18)o Professional advisors versus "dart throwers" (16-18)o Changing economic conditions in U.S. (33-37)o Bubble drivers and example (43-5o)o Economic dynamics of bubbles (50-54)o Forbes 400 list: sources of wealth (64-66)o Retirement planning (73-84)o Asset allocation: difficult to classify (103-106 and 113-116)o Active investment management: Alpha and Beta (110-112, 141-142, and 147-149)o Performance measurement and benchmarks (116-117)o Market risk bucket and portfolio (139-155)o Value investing (159-160)In my opinion, some of the most valuable material provided in the book is in Chapter 9, "Seven Steps to Implementation," as Chhabra explains HOW each reader can complete a specific process with this sequence of initiatives (Pages 121-137):Step 1: Outline Your Goals2. Convert Your Goals Into Cash Flows3. Create Your Wealth Allocation Snapshot4. Assess Your Risk Allocation5. Implement Asset Allocation and Portfolio Diversification6. Analyze and Stress Test7. Review and RebalanceHe explains why sticking with this seven-step process "in a disciplined fashion through all kinds of market cycles -- from boring markets to market bubbles and crashes -- is likely to yield better results than most active managers can deliver. More important, these steps are your road map for achieving life goals in a world where money and markets are a necessary input but not an end unto themselves."When concluding his brilliant book, Ashvin Chhabra cites advice offered by Yale's David Swensen to alumni tempted to follow the university's endowment investment model: "Do not try this at home." What about replicating Warren Buffett's approach? They "would do well to pursue a more conventional route: Buying Berkshire Hathaway's stock."

10/10 recommend. Among the two dozen finance/investing books I've read, this is the most valuable one for how to think about asset allocation and reconcile the competing goals of wealth creation vs preservation. He provides a thoughtful and holistic perspective on wealth management.I spent a lot of time trying to find a rational, systematic approach to determining exactly how to decide what percentage of a portfolio to allocate to stocks, bonds, and alternatives. My answer came in two forms, one from Modern Portfolio Theory (MPT), and the other from this book, a critique of MPTs limitations.MPT says to think about your financial goals, time horizon, and risk tolerance then build a diversified portfolio accordingly.Ashvin addresses major shortcomings of Modern Portfolio Theory, namely that markets are not stable, historical performance cannot predict the future, and that wealth creation does not come from a diversified, optimized portfolio. He provides a new way to think about choosing your asset allocation to reconcile where the assumptions of modern portfolio theory fall short.To me, this book fills a significant gap in prevailing wisdom in the wealth advisement and investing world for how to determine your asset allocation and how to think about long-term investing. It's the most thoughtful framework to managing wealth in a way that maximizes the probability of meeting one's goals that I've found.

The main lesson about not trying to “beat the market” and classifying your assets and objectives in buckets is a very powerful idea.The author also points out and explains why copying some strategies of successful investors can be a trap for individual investors.Just didn’t give it 5 stars because some parts were jargon-heavy and a bit hard to understand.

Challenges the cnventional framework on investing.The three bucket approach allows investors to think about thei goals amd hopefully meet them

I had to do a bit of effort to finish the first couple of episodes but after that it turned out to be one of of the most insightful books I have ever read. It is an eye opener. Totally recommended, specially for people wanting to get to know more about personal investments and how to secure a better future.

Wer sich seit einiger Zeit mit der Frage herumschlägt, unter welchen Gesichtspunkten und mit welcher Taktik man langfristig Vermögen aufbaut, wird dieses Buch hochinteressant und spannend finden.Es geht dem Autor hier nicht um konkrete Produktempfehlungen a la "dieser Fonds" oder "jene Aktie", sondern um die Vorstellung eines fundierten, empirisch tragfähigen Konzepts, welches sich in der Praxis von jedem, der sich grundsätzlich Gedanken zu Finanzanlagen macht, umsetzen lässt.Grundlage hierfür bildet die Effizienzmarkthypothese, auf deren Erkenntnis eine Erweiterung des Anlage-Konzepts in verständlichen, nachvollziehbaren Worten geschildet wird.Im Kern lernt man, dass verschiedene (finanzielle) Lebensziele unterschiedliche Vorsorge- und Anlagestrategien fordern - es geht viel um die Gewichtung von Prioritäten, diese systematisch zu erfassen und entsprechend mit einem Wert zu versehen.Für alle, die nach dem nächsten Aktien-Geheimtipp oder einer todsicheren Anlage suchen: Finger weg.Für alle, die sich auf strategische Art Gedanken um ihre Finanzen machen wollen und die Grundzüge der Effizienzmarkthypothese verinnerlicht haben, ist dieses Buch ein hervorragender Begleiter.