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Goals-based Investing summary

Tony Davidow

A Visionary Framework for Wealth Management

4 (145 ratings)
25 mins

Brief summary

Goals-Based Investing by Tony Davidow is a guide for investors looking to create a personalized investment strategy that is in line with their long-term financial goals. It offers practical advice on how to translate financial goals into specific investment objectives and how to measure progress.

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    Goals-based Investing
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    The financial services industry is in a state of continuous evolution.

    Whether you’re a seasoned investor or relatively new to the topic, you might not know exactly who the key players in the financial-services industry are, and how their roles in wealth management differ. So, let’s start with a quick overview.

    First, there are wealth-management firms. These include companies like Morgan Stanley and Merrill Lynch. Such companies carry out research and due diligence. They also provide support to financial advisors. The financial advisors themselves work for the wealth-management firms, advise clients directly, and may also use asset managers to provide investment advice. Then there are custodians. Examples include companies like Schwab and Fidelity. They provide custodial services, technology, research, and trading support. And finally, we have asset managers such as Blackrock, Fidelity, and JP Morgan. These companies manage money via mutual funds, exchange-traded funds (ETFs), hedge funds, and other structures.

    Some of these companies also provide multiple services. For example, Morgan Stanley has retail and private-wealth divisions, but also has asset-management subsidiaries.

    Over the last 20 years, the financial sector has changed considerably – and so has the relationship between the various companies within it. It’s also likely that it will change further over the coming decade.

    Back in 1975, the founder of The Vanguard Group, Jack Bogle, created the first index fund. He was skeptical about the need for financial advisors and believed that investors could do just as well left to their own devices. Vanguard is now the second-largest asset manager worldwide with over $6 trillion in assets under management. After the general financial crisis, growth in do-it-yourself investment grew rapidly as investors began to question why they should use investment managers if they couldn’t protect them from market collapses. The use of ETFs accelerated after the crisis and advisors also began to use them more in building portfolios. 

    And then came COVID-19, the pandemic that stopped the world. It ushered in not only health issues but financial woes. The markets became very volatile and uncertainty reigned. Investors, shocked by rising death tolls, also watched helplessly as their wealth plummeted.

    Over the years, wealth-management practices have also needed to reinvent themselves in order to provide new services to their clients. This has required reskilling and training in order for advisors to understand issues such as estates, tax management, lending options, and charitable giving, for example.

    Financial advisors needed to help their clients through these troubled times, and in innovative ways – through the use of technology to reach their clients, for example. In a post-pandemic world, it is still unclear how financial advisors will engage with clients in the future. What is clear, though, is that they need to rise to the challenges that the sector faces now and in the coming decade, evolve their approach, or risk being replaced by robots and AI and ultimately becoming obsolete.

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    What is Goals-based Investing about?

    Goals-Based Investing (2022) explains how the wealth management industry is transforming, how modern portfolio theory is no longer considered modern, and how product evolution and regulatory changes are making it easier for investors and advisors to access market segments that were once the exclusive domain of large institutes.

    Goals-based Investing Review

    Goals-based Investing (2021) by Tony Davidow is a must-read for anyone looking to navigate the world of investing. Here's why this book stands out:

    • It offers clear, practical strategies for aligning your investments with your personal goals, helping you achieve financial success with purpose.
    • Through real-world case studies and expert insights, the book illustrates how goals-based investing can lead to more meaningful and fulfilling outcomes.
    • The book's accessible and engaging approach makes it an enjoyable read, making complex investment concepts easy to understand and implement.

    Who should read Goals-based Investing?

    • Financial advisors who are lifelong learners
    • High- and Ultra-high-net-worth investors and families
    • Anyone interested in how goals-based investing works

    About the Author

    Tony Davidow has held senior leadership roles at a range of industry leaders such as Morgan Stanley, Charles Schwabb, and Guggenheim Investments. He’s president of T. Davidow Consulting, his independent advisory firm focused on content relating to asset allocation strategies, alternative investments, sustainable investment, and other topics. In 2020 he was awarded the Wealth Management Impact Award by the Investments and Wealth Institute.

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    Goals-based Investing FAQs 

    What is the main message of Goals-based Investing?

    The main message of Goals-based Investing is to focus on achieving specific financial goals rather than simply accumulating wealth.

    How long does it take to read Goals-based Investing?

    The reading time for Goals-based Investing varies, but it typically takes several hours. The Blinkist summary can be read in just 15 minutes.

    Is Goals-based Investing a good book? Is it worth reading?

    Goals-based Investing is worth reading because it provides valuable insights and practical strategies for aligning investments with specific financial objectives.

    Who is the author of Goals-based Investing?

    The author of Goals-based Investing is Tony Davidow.

    What to read after Goals-based Investing?

    If you're wondering what to read next after Goals-based Investing, here are some recommendations we suggest:
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    • Playing with FIRE (Financial Independence Retire Early) by Scott Rieckens
    • Thinking, Fast and Slow by Daniel Kahneman
    • Partnering by Jean Oelwang
    • The Insider's Edge to Real Estate Investing by James P. Nelson with Rachel Hartman
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