Lifecycle Investing : A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio
by Ayres, IanFormat: Hardcover
Pub. Date: 2010-05-04
Publisher(s): Perseus Books Group
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Summary
In finance, as in life, there's no such thing as a free lunchunless you're well diversified. The push toward diversification inspires many investors to buy index funds, a smart move. But most people have missed the chance to diversify over their investing lifecycle.Now, for the first time, Ian Ayres and Barry Nalebufftwo of the most innovative thinkers in business, law, and economicspresent investors with a set of tools that will allow us to diversify our portfolios overtime, a radical innovation. By leveraging our portfolios when we're young (and leveraging less as we get older), nearly all investors can reduce risk while improving returns. Clearly written and extensively supported by ground-breaking research,The Lifecycle Investorpresents a simple idea for individual investors that promises to radically transform how all of us retire.
Author Biography
Ian Ayres is the William K. Townsend Professor at Yale Law School and the Yale School of Management, and is editor of the Journal of Law, Economics and Organization. In addition to his best-selling SuperCrunchers, Ayres has written for the New York Times, the Wall Street Journal, Financial Times, International Herald Tribune, and The New Republic. He lives in New Haven, Connecticut.
Barry Nalebuff is Professor of Economics and Management at the Yale School of Management. His books include The Art of Strategy (an update of the best-selling Thinking Strategically) and Co-opetition. He is the author of fifty scholarly articles and has been an associate editor of five academic journals. He lives in New Haven, Connecticut.
Table of Contents
| Introduction | p. 1 |
| Diversifying Time | p. 3 |
| The Free Lunch | p. 4 |
| Two Cheers for Home Ownership | p. 6 |
| Our Plan | p. 9 |
| A Leap of Faith | p. 11 |
| Gambling His Retirement? | p. 12 |
| Total Dollar Years | p. 15 |
| Use Leverage | p. 15 |
| (Dis)counting Your Chickens Before They Hatch | p. 18 |
| Discounting Your Income | p. 22 |
| The Status Quo | p. 23 |
| Beating the Status Quo | p. 25 |
| The Plan | p. 27 |
| The Cookie Jar | p. 27 |
| Two Numbers | p. 28 |
| Three Phases | p. 30 |
| Social Security | p. 33 |
| Why Stop at 2:1? | p. 35 |
| Historical Performance | p. 37 |
| Eureka | p. 39 |
| Less Risk or More Return | p. 42 |
| Show Me the Money | p. 45 |
| The Crash | p. 50 |
| The Dominance of Leverage | p. 52 |
| Social Security | p. 55 |
| Conclusions | p. 59 |
| FAQs | p. 59 |
| What If ... | p. 67 |
| It's a Wonderful Stock Market | p. 68 |
| The FTSE and the Nikkei | p. 69 |
| It's a Mediocre Life | p. 72 |
| Pessimists Should Still Start Out Leveraged | p. 74 |
| 10,000 Futures | p. 76 |
| A Meaner Mean | p. 79 |
| Fat Tail Fears | p. 80 |
| But Is Now the Right Time? | p. 82 |
| To P/E or Not to P/E | p. 86 |
| Starting and Stopping | p. 93 |
| Starting Late | p. 93 |
| Starting Early | p. 100 |
| Ramping Up for Retirement | p. 105 |
| A Road That Never Ends? | p. 110 |
| Contraindications | p. 117 |
| Not Having Credit Card Debt: Priceless | p. 119 |
| Minimum Investments | p. 121 |
| Matching 401 (k) Plans | p. 123 |
| Saving for College (and a Rainy Day) | p. 124 |
| Wall Street Is Close to Home | p. 127 |
| Once Burned, Twice Shy | p. 130 |
| Conflicting Advice | p. 133 |
| What's Your Share? | p. 135 |
| One Cheer for RRAs | p. 139 |
| Inside (Wire) Job | p. 142 |
| How Much Is Enough? | p. 145 |
| Will I Have Enough? | p. 148 |
| What Is My Income Stream? | p. 150 |
| The Mechanics | p. 155 |
| 401(k), 403(b), and 457 Plans | p. 155 |
| IRA | p. 156 |
| How to Find an Option with 2:1 Leverage | p. 157 |
| What Is the Cost of Borrowing? | p. 159 |
| Another Approach | p. 162 |
| Investing with ProFunds UltraBull | p. 163 |
| Rebalancing | p. 165 |
| Buying Stock on Margin | p. 167 |
| Buying Bonds | p. 169 |
| What If Everyone Did It? | p. 173 |
| A History of Housing Leverage | p. 175 |
| Back to the Future | p. 177 |
| Diversification Is Dangerous | p. 182 |
| The Future Regulation of Asset Diversification | p. 188 |
| The Goal Line | p. 193 |
| Notes | p. 197 |
| Acknowledgments | p. 215 |
| Index | p. 217 |
| Table of Contents provided by Ingram. All Rights Reserved. |
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