Finance & Fury Podcast

Welcome to Finance and Fury   Today – Talk about goals based investment – setting up buckets of investment allocations to meet needs Approaches to portfolio construction three common approaches in building the framework of a client’s investment solution: traditional (asset-only) or liability approach, Today - goals-based investment (GBI) approach.   The traditional, asset-only approach to investing is based on the seminal work of modern portfolio theory (MPT) - 1952 most common approach - build optimal asset allocations for investors based on their aversion to risk (as measured by investment return volatility). Liability driven – Governments or Insurance companies – meet large payment obligations – need immunised investments for short term funding cash inflows are likely to match and cover their obligated cash out flows   Goals-based ‘bucket’ approach People have many complex and competing funding needs (e.g. living expenses, children’s education, health costs, holidays) To aim to achieve these - GBI