{"product_id":"the-stewardship-of-wealth-website-isbn-9781118321867","title":"The Stewardship of Wealth, + Website","description":"\u003cb\u003eIndispensable advice for building a lasting financial legacy\u003c\/b\u003e  \u003cp\u003eBuilding wealth is hard to do, but maintaining that wealth across generations is even more challenging. In \u003ci\u003eThe Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors + Website\u003c\/i\u003e, wealth advice expert Gregory Curtis reveals the investment secrets of the world's wealthiest families, so that financial planners, fund managers, and wealthy individuals everywhere can follow in their footsteps. Outlining the best practices for preserving and growing wealth, the book details exactly how to build a lasting financial legacy in the face of taxes, inflation, investment costs, and the conflicts of interest that are endemic to the financial advisory business.\u003c\/p\u003e \u003cp\u003eWealthy families are at the very heart of America's exceptionalism, of the vigor, resilience, and creativity that have made the U.S. the most successful nation in history. \u003ci\u003eThe Stewardship of Wealth\u003c\/i\u003e's discusses the crucial role private wealth continues to play in America's remarkable economic and cultural success and the issues wealthy families and their advisors face, presenting a step-by-step guide to better managing liquid wealth.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eReveals the wealth management strategies employed by America's wealthiest families and their financial managers\u003c\/li\u003e \u003cli\u003eExplores the challenges to ensuring that money stays in the family, from portfolio design to manager selection to monitoring investment performance, and much more\u003c\/li\u003e \u003cli\u003eDetails the essential steps for ensuring a lasting financial legacy\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eAn examination of the key issues involved in managing private wealth, especially for affluent families, \u003ci\u003eThe Stewardship of Wealth + Website\u003c\/i\u003e is the ultimate guide to building a financial legacy that will last.\u003c\/p\u003e \u003cp\u003ePreface xix\u003c\/p\u003e \u003cp\u003eAcknowledgments xxxi\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One The Importance of Private Capital\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Wealth in America: The Indispensable Rich 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDemocracy and Capitalism 6\u003c\/p\u003e \u003cp\u003eCapitalism and Its Contradictions 7\u003c\/p\u003e \u003cp\u003eProvidential Societies 10\u003c\/p\u003e \u003cp\u003eRisk and Strength 12\u003c\/p\u003e \u003cp\u003eAmerica and Decline 13\u003c\/p\u003e \u003cp\u003eOn China 15\u003c\/p\u003e \u003cp\u003eAddressing the Declinists 17\u003c\/p\u003e \u003cp\u003eConclusion: American Distinctiveness and Private Wealth 19\u003c\/p\u003e \u003cp\u003eNotes 21\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Creative Capital 25\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA (Brief) Moral History of Capitalism 26\u003c\/p\u003e \u003cp\u003eThe Ancients 27\u003c\/p\u003e \u003cp\u003eMoral Arguments for Capitalism 28\u003c\/p\u003e \u003cp\u003eVoltaire 28\u003c\/p\u003e \u003cp\u003eAdam Smith 30\u003c\/p\u003e \u003cp\u003eHegel 31\u003c\/p\u003e \u003cp\u003eContemporary Discussions 32\u003c\/p\u003e \u003cp\u003eThe Moral Basis of Private Capital 33\u003c\/p\u003e \u003cp\u003eCreative Capital in America 34\u003c\/p\u003e \u003cp\u003eHigher Education: The Case of St. John’s College 37\u003c\/p\u003e \u003cp\u003ePolitics: The Conservative Resurgence 38\u003c\/p\u003e \u003cp\u003eNew Business Ideas: Venture Capital in America 39\u003c\/p\u003e \u003cp\u003eCreative Capital and Vibrant Societies 42\u003c\/p\u003e \u003cp\u003eWhy Do Creative Capitalists Persist? 43\u003c\/p\u003e \u003cp\u003eThe Indispensable Nation 43\u003c\/p\u003e \u003cp\u003eConclusion: Underdogs and Bullies 45\u003c\/p\u003e \u003cp\u003eNotes 47\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two The Stewardship of Wealth\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Are We Living in a Permanent Financial Crisis? 53\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe End of History (Again) 54\u003c\/p\u003e \u003cp\u003eA Permanent Financial Crisis? 54\u003c\/p\u003e \u003cp\u003eThe Cause of the Crisis Matters 55\u003c\/p\u003e \u003cp\u003eThe Industrial Revolution and Its Aftermath 56\u003c\/p\u003e \u003cp\u003eThe Great (and Strange) Experiment 57\u003c\/p\u003e \u003cp\u003eSeize the Means of Production! 59\u003c\/p\u003e \u003cp\u003eThe Power to Tax is the Power to Destroy—Societies 60\u003c\/p\u003e \u003cp\u003e‘‘Borrowing \u003ci\u003e. . . \u003c\/i\u003ethe Disease is Incurable’’ 61\u003c\/p\u003e \u003cp\u003eNow What? 63\u003c\/p\u003e \u003cp\u003eBut, First, a Note about Germany 66\u003c\/p\u003e \u003cp\u003eInvesting Capital in a (Very) Uncertain World 67\u003c\/p\u003e \u003cp\u003eConclusion: A World At Risk 68\u003c\/p\u003e \u003cp\u003eNotes 68\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Risk 73\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFamilies and Investment Risk 73\u003c\/p\u003e \u003cp\u003e‘‘Low’’-Risk Investments 74\u003c\/p\u003e \u003cp\u003e‘‘High’’-Risk Investments 75\u003c\/p\u003e \u003cp\u003e‘‘Reasonable’’-Risk Investments: Marketable Securities 76\u003c\/p\u003e \u003cp\u003eThe Law of Supply and Demand (Again) 76\u003c\/p\u003e \u003cp\u003eIdiosyncratic Ideas about Risk 77\u003c\/p\u003e \u003cp\u003eReal Risks: Those Embedded in the Process of Investing 78\u003c\/p\u003e \u003cp\u003eIndividual Stock Risk versus Broad Market Risk 78\u003c\/p\u003e \u003cp\u003ePrice Volatility 79\u003c\/p\u003e \u003cp\u003eWildness in the Tails 81\u003c\/p\u003e \u003cp\u003eInvestor Behavior 82\u003c\/p\u003e \u003cp\u003eMaking a Truly Terrible Decision 83\u003c\/p\u003e \u003cp\u003eVariance Drain 83\u003c\/p\u003e \u003cp\u003eDick and Jane and Variance Drain 84\u003c\/p\u003e \u003cp\u003eLater, at Le Cirque 85\u003c\/p\u003e \u003cp\u003eVariance Drain Scenarios 86\u003c\/p\u003e \u003cp\u003eBehavioral Finance: Are We Hard-Wired for Failure? 87\u003c\/p\u003e \u003cp\u003eProfessor Odean on Behavioral-Inspired Wealth Transfer 88\u003c\/p\u003e \u003cp\u003eWhat Can We Do about It? 89\u003c\/p\u003e \u003cp\u003eEdith and the Headwinds She Faces 90\u003c\/p\u003e \u003cp\u003eThe First Thing Edith Forgot: Variance Drain 91\u003c\/p\u003e \u003cp\u003eThe Second Thing Edith Forgot: Inflation 92\u003c\/p\u003e \u003cp\u003eThe Third Thing Edith Forgot: Investment Costs 92\u003c\/p\u003e \u003cp\u003eThe Fourth Thing Edith Forgot: Taxes 92\u003c\/p\u003e \u003cp\u003eThe Fifth Thing Edith Forgot: Spending 93\u003c\/p\u003e \u003cp\u003eWhat Should Edith Do? 93\u003c\/p\u003e \u003cp\u003eConclusion: Preserving Wealth is Hard Slogging 96\u003c\/p\u003e \u003cp\u003eNotes 97\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 The Collapse of Ethical Behavior 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Caused the Crisis? 101\u003c\/p\u003e \u003cp\u003eAn Unsavory Rehash of the Ethical Failures 102\u003c\/p\u003e \u003cp\u003eEthical Failures in Subprime Lending 102\u003c\/p\u003e \u003cp\u003eEthical Failures among the Subprime Lending Banks 103\u003c\/p\u003e \u003cp\u003eEthical Failures in Auction Rate Securities 104\u003c\/p\u003e \u003cp\u003eEthical Failures among the GSEs 105\u003c\/p\u003e \u003cp\u003eThe Contemptible Public Disclosures of Financial Firms 107\u003c\/p\u003e \u003cp\u003eShorting the Securities You Are Selling to Your Clients 107\u003c\/p\u003e \u003cp\u003ePaulson Bernanke \u0026amp; Co. and the Conspiracy of Silence 108\u003c\/p\u003e \u003cp\u003eHow Scandal Became Crisis 109\u003c\/p\u003e \u003cp\u003eTrust 109\u003c\/p\u003e \u003cp\u003eCustomers 110\u003c\/p\u003e \u003cp\u003eWhy Such an Ethical Swamp? 111\u003c\/p\u003e \u003cp\u003eHedge Fund Wannabees 111\u003c\/p\u003e \u003cp\u003e‘‘When the Music Plays You Have to Dance’’ 112\u003c\/p\u003e \u003cp\u003eCompensation Follies 113\u003c\/p\u003e \u003cp\u003eConflicts upon Conflicts 114\u003c\/p\u003e \u003cp\u003eWhere Do We Go from Here? 115\u003c\/p\u003e \u003cp\u003eConclusion: Fixing the Industry 116\u003c\/p\u003e \u003cp\u003eNotes 117\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Finding the Right Advisor 119\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOpen Architecture as a Disruptive Business Model in the Advisory World 120\u003c\/p\u003e \u003cp\u003eWhat is Open Architecture and Why is It So Important? 120\u003c\/p\u003e \u003cp\u003eOpen Architecture in the Financial Industry 121\u003c\/p\u003e \u003cp\u003eThe Impact on Investors 123\u003c\/p\u003e \u003cp\u003eThe Outsourced CIO Model 124\u003c\/p\u003e \u003cp\u003eThe Evolution of the Traditional, Nondiscretionary Model 125\u003c\/p\u003e \u003cp\u003eDocumenting the Trend toward the Outsourced CIO Model 126\u003c\/p\u003e \u003cp\u003eWhat’s Driving the Trend toward the Outsourced CIO Model? 126\u003c\/p\u003e \u003cp\u003eThe Outsourced CIO Model Today 127\u003c\/p\u003e \u003cp\u003eAdvantages and Disadvantages of the Outsourced CIO Model 129\u003c\/p\u003e \u003cp\u003eIs the Outsourced CIO Model Right for Your Family? 132\u003c\/p\u003e \u003cp\u003eHow to Select a Good Outsourced CIO Advisor 133\u003c\/p\u003e \u003cp\u003eFinding the Right Advisor for Your Family 135\u003c\/p\u003e \u003cp\u003eDimensions of the Problem to Focus On 135\u003c\/p\u003e \u003cp\u003eThe Schulberg Family 136\u003c\/p\u003e \u003cp\u003eGathering Names 139\u003c\/p\u003e \u003cp\u003eThe RFP Process 139\u003c\/p\u003e \u003cp\u003eWhere is the Sample RFP? 143\u003c\/p\u003e \u003cp\u003eFinal Diligence 144\u003c\/p\u003e \u003cp\u003eWhere Does Diligence Leave Off and Psychodrama Begin? 145\u003c\/p\u003e \u003cp\u003eConclusion: Focusing On a Few Key Variables 146\u003c\/p\u003e \u003cp\u003eNotes 147\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Making Family Investment Decisions 149\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Family Investment Committee Today 150\u003c\/p\u003e \u003cp\u003eThe Origin of the Investment Committee 150\u003c\/p\u003e \u003cp\u003eCommittee Dynamics 151\u003c\/p\u003e \u003cp\u003eMaking an Impact 152\u003c\/p\u003e \u003cp\u003eAttempts to Deal with the Problem 152\u003c\/p\u003e \u003cp\u003eAsset Allocation Guidelines and Investment Policy Statements 152\u003c\/p\u003e \u003cp\u003eUsing Outside Experts to Populate the Investment Committee 153\u003c\/p\u003e \u003cp\u003eThe Separate Investment Management Corporation 153\u003c\/p\u003e \u003cp\u003eThe Family Investment Committee, Tomorrow 153\u003c\/p\u003e \u003cp\u003eThe Investment Committee Operating Manual 154\u003c\/p\u003e \u003cp\u003eOpportunity Costs: Prudence versus Returns 155\u003c\/p\u003e \u003cp\u003ePrudence versus Returns for Trustees 155\u003c\/p\u003e \u003cp\u003ePrudence versus Returns for Families 157\u003c\/p\u003e \u003cp\u003eStriving for Prudence and Returns 159\u003c\/p\u003e \u003cp\u003eConclusion: Focusing On What Families Do Best 161\u003c\/p\u003e \u003cp\u003eNotes 161\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Trusts 163\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOpen-Architecture Trusts 163\u003c\/p\u003e \u003cp\u003eA Brief, Unconventional (but Wickedly Accurate) History of the Common-Law Trust from the Client’s Perspective 164\u003c\/p\u003e \u003cp\u003eProfessional Management 165\u003c\/p\u003e \u003cp\u003eDeep Pockets 165\u003c\/p\u003e \u003cp\u003ePerpetual Life 166\u003c\/p\u003e \u003cp\u003eSound Exercise of Discretion 166\u003c\/p\u003e \u003cp\u003eDown with the Bundled Trust! Up with the Open-Architecture Trust! 166\u003c\/p\u003e \u003cp\u003eActivities Required to Operate a Trust 167\u003c\/p\u003e \u003cp\u003eThe Nitty-Gritty of Establishing Open-Architecture Trusts 169\u003c\/p\u003e \u003cp\u003eThe Rise of Beneficiary Rights 170\u003c\/p\u003e \u003cp\u003eIf I Was a Big Trust Institution 171\u003c\/p\u003e \u003cp\u003eSemi-Open Architecture Trusts 172\u003c\/p\u003e \u003cp\u003ePrivate Trust Companies 173\u003c\/p\u003e \u003cp\u003eTotal Return Trusts 174\u003c\/p\u003e \u003cp\u003eThe Uniform Principal and Income Act 174\u003c\/p\u003e \u003cp\u003eUnitrust Legislation 175\u003c\/p\u003e \u003cp\u003eThe IRS View 175\u003c\/p\u003e \u003cp\u003eTotal Return Trusts in States without Total Return Legislation 175\u003c\/p\u003e \u003cp\u003eConclusion: Let’s Get Revolutionary 176\u003c\/p\u003e \u003cp\u003eNotes 176\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three The Rich Get Richer\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Designing Taxable Investment Portfolios 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Markowitz Revolution 184\u003c\/p\u003e \u003cp\u003eProblems with Mean Variance Optimization 185\u003c\/p\u003e \u003cp\u003eComputational Power 185\u003c\/p\u003e \u003cp\u003eGarbage In, Garbage Out 186\u003c\/p\u003e \u003cp\u003eThe Challenge of Developing Thoughtful Data Inputs 187\u003c\/p\u003e \u003cp\u003eMultivariate Modeling 187\u003c\/p\u003e \u003cp\u003eTaking Taxes into Account 188\u003c\/p\u003e \u003cp\u003eMonte Carlo Simulations 189\u003c\/p\u003e \u003cp\u003eThe Problem of Fat Tails 190\u003c\/p\u003e \u003cp\u003eBest Practices in Designing Investment Portfolios for Families 192\u003c\/p\u003e \u003cp\u003eWhat Are the Objectives for the Portfolio? 192\u003c\/p\u003e \u003cp\u003eCurrent Claims versus Growth Claims on a Portfolio 193\u003c\/p\u003e \u003cp\u003eMatching Portfolio Assets to Each Type of Risk 194\u003c\/p\u003e \u003cp\u003eTraditional Asset Allocation Modeling 195\u003c\/p\u003e \u003cp\u003eModern Asset Allocation Modeling 196\u003c\/p\u003e \u003cp\u003eSatisfying Portfolio Claims \u003ci\u003ePrudently \u003c\/i\u003e197\u003c\/p\u003e \u003cp\u003eConclusion: Art versus Science 198\u003c\/p\u003e \u003cp\u003eNotes 198\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Adding Value to Family Investment Portfolios 203\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMoving from the Current Strategy to the New Strategy 203\u003c\/p\u003e \u003cp\u003eAdding Value through Manager Selection 205\u003c\/p\u003e \u003cp\u003eAdding Value by Tactically Repositioning the Portfolio 206\u003c\/p\u003e \u003cp\u003eAdding Value through Opportunistic Investments 207\u003c\/p\u003e \u003cp\u003eAdding Value through Monitoring and Rebalancing 209\u003c\/p\u003e \u003cp\u003eConclusion: We Need All The Value-Add We Can Get 210\u003c\/p\u003e \u003cp\u003eNotes 210\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Investing in U.S. and Non-U.S. Equities 211\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eU.S. Large- and Mid-Capitalization Stocks 212\u003c\/p\u003e \u003cp\u003eU.S. Small-Capitalization Stocks 214\u003c\/p\u003e \u003cp\u003eInternational Developed Country Stocks 216\u003c\/p\u003e \u003cp\u003eInternational Diversification is Unnecessary 217\u003c\/p\u003e \u003cp\u003eJust When You Need It, Diversification Doesn’t Work 218\u003c\/p\u003e \u003cp\u003eIt’s Easier and Safer to Gain International Exposure by Investing in ADRs 219\u003c\/p\u003e \u003cp\u003eThe Bottom Line 219\u003c\/p\u003e \u003cp\u003eEmerging and Frontier Markets 220\u003c\/p\u003e \u003cp\u003eEmerging Markets 220\u003c\/p\u003e \u003cp\u003eFrontier Markets 221\u003c\/p\u003e \u003cp\u003eConclusion: Equity Securities Are At the Core of Most Portfolios 223\u003c\/p\u003e \u003cp\u003eNotes 223\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Investing Globally 225\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Go Global? 226\u003c\/p\u003e \u003cp\u003eWhy Stay Home? 228\u003c\/p\u003e \u003cp\u003eGlobal Investing in the Real World (or, Maybe, Real Investing in a Global World) 229\u003c\/p\u003e \u003cp\u003eIs ‘‘Global Equities’’ an Asset Class? 229\u003c\/p\u003e \u003cp\u003eIs It Possible to Succeed as a Global Equity Manager? 230\u003c\/p\u003e \u003cp\u003eCan a Global Manager Outperform in the U.S. Portion of its Portfolio? 231\u003c\/p\u003e \u003cp\u003eDo the BRICs Really Matter as Much as We Think? 231\u003c\/p\u003e \u003cp\u003eWhat about Investing in Multinationals? 233\u003c\/p\u003e \u003cp\u003eThe Challenge of Stock-Picking in ‘‘Non-Nonsynchronous’’ Markets 233\u003c\/p\u003e \u003cp\u003eThinking Nonmonolithically 233\u003c\/p\u003e \u003cp\u003eConclusion: Think Globally, Act Locally 234\u003c\/p\u003e \u003cp\u003eNotes 237\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Investing in Real Assets 239\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReal Estate 239\u003c\/p\u003e \u003cp\u003eLeverage 240\u003c\/p\u003e \u003cp\u003eWhy Invest in Real Estate? 240\u003c\/p\u003e \u003cp\u003eHow to Invest in Real Estate 241\u003c\/p\u003e \u003cp\u003eOil and Gas 243\u003c\/p\u003e \u003cp\u003eValue Creation Mechanisms 244\u003c\/p\u003e \u003cp\u003eHedging to Protect Value 245\u003c\/p\u003e \u003cp\u003eInvesting Strategies 246\u003c\/p\u003e \u003cp\u003eRecommendations 248\u003c\/p\u003e \u003cp\u003eCommodities 249\u003c\/p\u003e \u003cp\u003eSources of Return from Commodities Investing 250\u003c\/p\u003e \u003cp\u003eThe Commodities Indexes 251\u003c\/p\u003e \u003cp\u003eHistorical Risk, Return, and Sharpe Ratios 251\u003c\/p\u003e \u003cp\u003eHistorical Correlations 252\u003c\/p\u003e \u003cp\u003eSome Thoughts about Historical and Prospective\u003c\/p\u003e \u003cp\u003eCommodity Returns 252\u003c\/p\u003e \u003cp\u003eThe Role of Commodities in a Diversified Portfolio 253\u003c\/p\u003e \u003cp\u003eEffects of Rebalancing 254\u003c\/p\u003e \u003cp\u003eThe Impact of Extreme Events 254\u003c\/p\u003e \u003cp\u003eSummary 255\u003c\/p\u003e \u003cp\u003eConclusion: The Use and Misuse of Real Asset Exposure 255\u003c\/p\u003e \u003cp\u003eNotes 256\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Investing in Fixed Income 259\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMistakes Bond Investors Make 259\u003c\/p\u003e \u003cp\u003eEmploying Managers Who ‘‘Cheat’’ 259\u003c\/p\u003e \u003cp\u003ePaying Too Much for Bond Management 262\u003c\/p\u003e \u003cp\u003eEmploying Best Practices in Building Bond Portfolios 262\u003c\/p\u003e \u003cp\u003eBuilding Laddered Bond Portfolios 263\u003c\/p\u003e \u003cp\u003eOwning Only High-Grade, Noncallable, Long-Term Bonds 264\u003c\/p\u003e \u003cp\u003eActively Managing Municipal Bonds 264\u003c\/p\u003e \u003cp\u003eActively Managing Corporate Bonds 267\u003c\/p\u003e \u003cp\u003eHigh-Yield Bonds 267\u003c\/p\u003e \u003cp\u003eManaging Cash 269\u003c\/p\u003e \u003cp\u003eConclusion: Fixed Income is Underappreciated 270\u003c\/p\u003e \u003cp\u003eNotes 271\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Investing in Hedge Funds 273\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat is a Hedge Fund? 274\u003c\/p\u003e \u003cp\u003eTypes of Hedge Funds 275\u003c\/p\u003e \u003cp\u003eChallenges for Hedge Fund Investors 277\u003c\/p\u003e \u003cp\u003eBuilding a First-Rate Hedge Fund Portfolio 285\u003c\/p\u003e \u003cp\u003eConclusion: Should Anyone but Yale Invest in Hedge Funds? 288\u003c\/p\u003e \u003cp\u003eNotes 290\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Investing in Private Equity 293\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Invest in PE? 294\u003c\/p\u003e \u003cp\u003ePersistence of Returns 294\u003c\/p\u003e \u003cp\u003eThe Importance of Diversification 295\u003c\/p\u003e \u003cp\u003ePrivate Equity Returns 296\u003c\/p\u003e \u003cp\u003eThe Return Characteristics of PE Investments 296\u003c\/p\u003e \u003cp\u003eGaining Exposure to Private Equity 297\u003c\/p\u003e \u003cp\u003ePE Funds of Funds 298\u003c\/p\u003e \u003cp\u003eA Global Asset Class 298\u003c\/p\u003e \u003cp\u003eIlliquidity and the J-Curve Effect 299\u003c\/p\u003e \u003cp\u003eRamping Up to Your Target Allocation 300\u003c\/p\u003e \u003cp\u003eWaterfall Analysis 300\u003c\/p\u003e \u003cp\u003eSecondary PE Investing 302\u003c\/p\u003e \u003cp\u003eThe Evolution of Secondary Investing 302\u003c\/p\u003e \u003cp\u003eSecondary Investing Strategies 303\u003c\/p\u003e \u003cp\u003eIdentifying High-Quality Secondary Funds 304\u003c\/p\u003e \u003cp\u003eConclusion: The Ultimate Aspirational Asset 304\u003c\/p\u003e \u003cp\u003eNotes 305\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 Working with Money Managers 307\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Business of Money Management 308\u003c\/p\u003e \u003cp\u003eHapless Asset Management 308\u003c\/p\u003e \u003cp\u003eSurvivorship Bias 311\u003c\/p\u003e \u003cp\u003eFees and Costs 311\u003c\/p\u003e \u003cp\u003eTraditional Managers 313\u003c\/p\u003e \u003cp\u003eThe Main Problem: Recent Good Performance is Almost Irrelevant 314\u003c\/p\u003e \u003cp\u003eCharacteristics of Best-in-Class Managers 317\u003c\/p\u003e \u003cp\u003eObjectionable Characteristics 320\u003c\/p\u003e \u003cp\u003eFinding Best-in-Class Managers 320\u003c\/p\u003e \u003cp\u003eMonitoring Best-in-Class Managers 323\u003c\/p\u003e \u003cp\u003eActive, Indexed, Fundamental, and Structured Products 324\u003c\/p\u003e \u003cp\u003eAlternative Managers 326\u003c\/p\u003e \u003cp\u003eWorking with Hedge Funds 326\u003c\/p\u003e \u003cp\u003eWorking with Private Equity Funds 328\u003c\/p\u003e \u003cp\u003eConclusion: At Least Managers Are Interesting 329\u003c\/p\u003e \u003cp\u003eNotes 330\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Managing Investment-Related Taxes 331\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDesigning Portfolios from an After-Tax Perspective 332\u003c\/p\u003e \u003cp\u003eAsset Location 332\u003c\/p\u003e \u003cp\u003eAsset Class Strategies 333\u003c\/p\u003e \u003cp\u003eTax-Aware Managers 333\u003c\/p\u003e \u003cp\u003eIdentifying Tax-Aware Managers 335\u003c\/p\u003e \u003cp\u003eHarvesting Losses 337\u003c\/p\u003e \u003cp\u003eConclusion: You Can’t Eat Gross Returns 338\u003c\/p\u003e \u003cp\u003eNotes 338\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Asset Location and Implementation 341\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAsset Location Issues 341\u003c\/p\u003e \u003cp\u003eExamples of Asset Locations and the Associated Investment Implications 342\u003c\/p\u003e \u003cp\u003eImplementation Issues 347\u003c\/p\u003e \u003cp\u003eMacro Considerations 348\u003c\/p\u003e \u003cp\u003eMicro Considerations 351\u003c\/p\u003e \u003cp\u003eImplementing in PE and Hedge 353\u003c\/p\u003e \u003cp\u003eConclusion: It’s Not Just a Technical Issue 353\u003c\/p\u003e \u003cp\u003eNotes 353\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20 Monitoring and Rebalancing Taxable Portfolios 355\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePerformance Monitoring 356\u003c\/p\u003e \u003cp\u003eMoney Manager Reports 356\u003c\/p\u003e \u003cp\u003eBank Custody Reports 357\u003c\/p\u003e \u003cp\u003eInvestment Consultant Reports 357\u003c\/p\u003e \u003cp\u003eConflicts between Reports 358\u003c\/p\u003e \u003cp\u003eInterpreting Performance Reports 359\u003c\/p\u003e \u003cp\u003eMonitoring Manager Performance 360\u003c\/p\u003e \u003cp\u003eRebalancing Taxable Portfolios 362\u003c\/p\u003e \u003cp\u003eSetting Strategic Ranges 363\u003c\/p\u003e \u003cp\u003eRebalance Back to What? 363\u003c\/p\u003e \u003cp\u003eHow Often to Rebalance? 364\u003c\/p\u003e \u003cp\u003eConclusion: Monitoring and Rebalancing Are Stewardship Issues 365\u003c\/p\u003e \u003cp\u003eNotes 366\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21 Investment Policy Statements 367\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Investment Policy Statement 367\u003c\/p\u003e \u003cp\u003eSpending Policy Statements 369\u003c\/p\u003e \u003cp\u003eCash Guidelines 369\u003c\/p\u003e \u003cp\u003eManager Guidelines 369\u003c\/p\u003e \u003cp\u003eThe Investment Committee Policy Manual 370\u003c\/p\u003e \u003cp\u003eLetters to the Family 370\u003c\/p\u003e \u003cp\u003eConclusion: Don’t Skimp on Documenting Your Decisionmaking 370\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 22 Miscellaneous Challenges for Private Investors 371\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAsset Custody 371\u003c\/p\u003e \u003cp\u003eWhat Services Does a Custodian Offer? 372\u003c\/p\u003e \u003cp\u003eEvaluating Custodians 373\u003c\/p\u003e \u003cp\u003eCustody Pricing 374\u003c\/p\u003e \u003cp\u003eCustody for Taxable Accounts 375\u003c\/p\u003e \u003cp\u003eSecurities Lending 376\u003c\/p\u003e \u003cp\u003eBrokers as Custodians 377\u003c\/p\u003e \u003cp\u003eConcentrated Security Positions 378\u003c\/p\u003e \u003cp\u003eDealing with the Emotional Impact of a Concentrated Position 381\u003c\/p\u003e \u003cp\u003eStrategies for Diversifying Concentrated Positions 382\u003c\/p\u003e \u003cp\u003eEstablishing a Family Office 384\u003c\/p\u003e \u003cp\u003eWhy a Family Office? 384\u003c\/p\u003e \u003cp\u003eWhat is the Minimum Size for a Family Office? 384\u003c\/p\u003e \u003cp\u003eWhat Responsibilities Are Carried Out by a Family Office? 384\u003c\/p\u003e \u003cp\u003eWhere to Begin? 386\u003c\/p\u003e \u003cp\u003eAre There Alternatives to the Stand-Alone Family Office? 387\u003c\/p\u003e \u003cp\u003eFamily Investment Partnerships 387\u003c\/p\u003e \u003cp\u003ePhilanthropy 389\u003c\/p\u003e \u003cp\u003eConclusion: There Are Challenges Everywhere We Look 392\u003c\/p\u003e \u003cp\u003eNotes 392\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAfterword: On Happiness 395\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStereotypes of the Rich 396\u003c\/p\u003e \u003cp\u003eThe Rich and the ‘‘Faux Rich’’ 396\u003c\/p\u003e \u003cp\u003eThe Real Way the Rich Are Different 398\u003c\/p\u003e \u003cp\u003eChildren and the Wealthy 400\u003c\/p\u003e \u003cp\u003eMarriage and the Wealthy 400\u003c\/p\u003e \u003cp\u003eWork and the Wealthy 401\u003c\/p\u003e \u003cp\u003eFailed Stewardship and Family Unhappiness 403\u003c\/p\u003e \u003cp\u003eWealth and Happiness 405\u003c\/p\u003e \u003cp\u003eNotes 405\u003c\/p\u003e \u003cp\u003eAbout the Companion Website 407\u003c\/p\u003e \u003cp\u003eAbout the Author 409\u003c\/p\u003e \u003cp\u003eIndex 411\u003c\/p\u003e  \u003cp\u003eHere comes a book that is a must-read, an instant classic. With a sure hand and an authoritative voice, it explains why private capital is essential to American democracy—and why it is in danger.\u003c\/p\u003e \u003cp\u003eThe book is called \u003ci\u003eThe Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors\u003c\/i\u003e, by Gregory D. Curtis, the founder of Greycourt \u0026amp; Co., the first open-architecture investment manager. Curtis convincingly argues that firms such as his will be the only ones standing in the not-so-distant future. Forget broker-dealers, salespeople, product pushers and all the others that sell rather than advise. They are dead meat.\u003c\/p\u003e \u003cp\u003eThe investment climate going forward doesn't look so rosy, he says. \"The West has reached the end of its own socioeconomic evolution and is now faced with the gargantuan task of reinventing itself,\" Curtis writes. That means remaking governments, creating new cultures and governing mechanisms, as well as new theories for how government can support itself.\u003c\/p\u003e \u003cp\u003e\"Needless to say,\" he continues, \"the investment implications of this are large and complex.\"\u003c\/p\u003e \u003cp\u003eSo is his book, so much so that I plan to break this discussion into two columns.\u003c\/p\u003e \u003cp\u003eThe first thing that struck me is that Curtis offers support to the much-maligned 1% of Americans who are the target of Occupy Wall Street. In part that might be because this is whom he works with. Curtis is sometimes called the \"super wealth manager for high rollers.\" Before founding Greycourt, this Harvard Law School grad served for many years as president of a family office for the Mellon family and president of the Laurel Foundation.\u003c\/p\u003e \u003cp\u003eCurtis says that the super wealthy and their use of creative capital offer the essential ingredient that makes America America. \"The production of private wealth is a crucial aspect of the singular success of the American experiment,\" he writes. \"Private capital is the most important capital in the world, and without it on a grand scale, it would be impossible to imagine America.\"\u003c\/p\u003e \u003cp\u003eCurtis believes that private capital is the \"continuing vigor\" that drives the country. The competitive spirit, he says, \"animates\" the society and allows people to become rich to do things useful to the public at large.\u003c\/p\u003e \u003cp\u003e\"If that spirit were to become constrained by political or cultural mechanisms, America would rather quickly come to resemble its European cousins,\" he says. And to make the lure of wealth meaningful, \"we must be willing to accept and tolerate the consequences of competition.\"\u003c\/p\u003e \u003cp\u003eCurtis argues that great wealth has not created a selfish society. He gives numerous examples of how wealthy people with passion and purpose have built brilliant things, using ideas for art and education and politics to build \"works of art\" such as colleges, churches and charities that wouldn't otherwise be possible. \"The American system of private philanthropy could not persist without the creative capital of the wealthy,\" he writes. Curtis estimates that almost 10% of all charitable giving comes from just 500 families.\u003c\/p\u003e \u003cp\u003eIn Part I of the book, Curtis speculates about why America, more than any of the older free-market democracies, has managed to preserve its vigor. \"It is crucial to manage the private capital properly in order for the society to continue to function,\" he writes. And that’s where financial advisors come in.\u003c\/p\u003e \u003cp\u003eIf private capital is the most important capital in the world, he posits, and if the owners of that capital depend on financial advisors for success, that would make financial advising one of the most crucial jobs in America. That's why, he says, his book is \"directed to both wealthy families and their advisors.\"\u003c\/p\u003e \u003cp\u003eCurtis then moves on to Part II.\u003c\/p\u003e \u003cp\u003eChapter 5, which I found particularly meaty, examines the complex and disappointing world of finance as a business. \"I come down hard on my colleagues for the conflicts of interest that pervade the financial world, for the self-interest and utter lack of concern for clients, and for the corruption that has had global consequences,\" Curtis writes. The only legitimate reason for a firm to exist is a sense of responsibility to its customers. \"Once the customer walks—and they are walking away from the financial industry in gigantic numbers—the industry is doomed.\"\u003c\/p\u003e \u003cp\u003eCurtis spends a good deal of time discussing financial advisors who act as \"outsourced CIOs,\" a rapidly growing model first adopted by pension funds and other institutional investors and then more recently by family offices and multifamily offices. The crisis of 2008 has hastened the growth of this model, Curtis says, because it's hard for advisors to make crucial investment decisions without having discretion over investments. Without discretion, advisors face a time-consuming approval process, an unacceptable option when markets are moving rapidly. What had been a steady trend toward discretionary advice \"became a virtual torrent following the catastrophic market environment of mid-2007 to early 2009.\"\u003c\/p\u003e \u003cp\u003eIn Chapter 8, he looks at the world of private trusts. \"Trusts are a prominent feature of every wealthy family,\" Curtis writes, \"but organizing and managing trusts in sensible ways has become an increasing challenge as consolidation in the banking industry has eliminated most of the local trust banks.\"\u003c\/p\u003e \u003cp\u003eBy far the longest part of the book is Part III, entitled \"The Rich Get Richer: The Nuts and Bolts of Successful Investing,\" which is a description of the best investment practices for private investors. It's meant to appeal more to financial advisors than investors. I'll review that section of the book in my September column.\u003c\/p\u003e \u003cp\u003eMary Rowland can be reached at rowlandnyc@aol.com. She has been a business and personal finance journalist for 30 years and has written two books for financial advisors: Best Practices and In Search of the Perfect Model. (\u003ci\u003eFinancial Advisor Magazine\u003c\/i\u003e, October 2012)\u003cbr\u003e \u003cbr\u003e \u003c\/p\u003e \u003cp\u003e“In a legendary exchange between two great American authors, F. Scott Fitzgerald reportedly said: \"Let me tell you about the very rich. The rich are different from you and me.\" Ernest Hemingway famously replied: \"Yes, they have more money.\"\u003cbr\u003e \u003cbr\u003e While that assessment may have been oversimplified, both men were essentially correct.\u003cbr\u003e \u003cbr\u003e But wealth manager Gregory Curtis has made a far more comprehensive evaluation in his book, \"The Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors,\" which he wrote based on more than 30 years of handling the financial affairs of billionaire clients such as the Mellon family.\u003cbr\u003e \u003cbr\u003e \"To be sure, the challenges facing wealthy families who aspire to happiness -- that is all wealthy families -- are different from those of other families in the same way the challenges facing welfare families are different from those facing middle class families,\" wrote Curtis, chairman and founder of Greycourt \u0026amp; Co. Inc. in Pittsburgh.\u003cbr\u003e \u003cbr\u003e The stakes are much higher for the super wealthy in many ways, according to Curtis.\u003cbr\u003e \u003cbr\u003e Even if they get the investment stuff right, the money they have amassed could be at risk if they fail in other important areas. For instance, if rich parents don't raise their children right, the children will probably blow all the money, ruining their lives and others' in the process.\u003cbr\u003e \u003cbr\u003e \"Use your money to make the world a better place and devote your personal time to it because that's the most precious resource you have. Money, you have plenty of it. But getting your own hands dirty, rolling up your sleeves, and going out and doing something -- that's going to make you happy.\"\u003cbr\u003e \u003cbr\u003e \"So really 80 percent to 90 percent of American wealth disappears in about three generations. And that's pretty much true all over the world,\" he said.”\u003cbr\u003e —Tim Grant, distributed by Scripps Howard News Service, shns.com\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eGREGORY CURTIS\u003c\/b\u003e is the Chairman and founder of Greycourt \u0026amp; Co., Inc., a wealth advisory firm serving substantial families and select endowments on a global basis. Prior to founding Greycourt, Curtis served for many years as president of a family office for the Mellon family and as president of the Laurel Foundation. He currently serves on the investment committees for Carnegie Mellon University, The Pittsburgh Foundation, St. John's College, United Educators Insurance, and Winchester Thurston School, among others. Curtis is also a founder or cofounder of three investment firms, Greycourt \u0026amp; Co., Inc., The Investment Fund for Foundations, and Moneybags LLC.    \u003c\/p\u003e\u003cp\u003e\"The building of wealth, the management of wealth, and the deployment of wealth are activities that lie at the very heart of what has made America great.\"\u003cbr\u003e \u003cb\u003e—GREGORY CURTIS\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003eManaging capital successfully is naturally important to wealthy families. The true role of wealth, however, goes far beyond personal advantage. Private wealth, explains wealth advice expert Gregory Curtis in \u003ci\u003eThe Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors\u003c\/i\u003e, is essential to the vigor, resilience, and creativity that have made the United States the most successful nation in history. In this detailed, insightful book, Curtis reveals how—and why—financial planners, fund managers, and high-capital individuals everywhere can successfully ensure their wealth for current and future generations. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Stewardship of Wealth\u003c\/i\u003e begins by exploring the crucial role private wealth plays in America's remarkable economic and cultural success. It then examines the most critical issues faced by wealthy families, such as understanding investment risk, ethical behavior and conflicts of interest, finding the right financial advisor, and the challenge of making sound family investment decisions. \u003c\/p\u003e\u003cp\u003eFinally, Gregory Curtis offers you a step-by-step guide to the successful management of liquid wealth, focusing on best investment practices from portfolio design to manager selection to monitoring investment performance. \u003c\/p\u003e\u003cp\u003eThe successful stewardship of wealth, Curtis argues, goes beyond dollars-and-cents to include our relationships with our children and marriages, work ethic, and social values. By making wise personal choices, we can achieve happiness with—rather than despite—our wealth. \u003c\/p\u003e\u003cp\u003eWealthy families have already made an important contribution to America's remarkable economic success. With this powerful \"owner's manual\" to private capital, families can build a lasting legacy that will contribute to America's strength for generations to come.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990346973413,"sku":"NP9781118321867","price":65.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118321867.jpg?v=1761787451","url":"https:\/\/k12savings.com\/products\/the-stewardship-of-wealth-website-isbn-9781118321867","provider":"K12savings","version":"1.0","type":"link"}