Personal Benchmark: Integrating Behavioral Finance and Investment Management

Preface

The insight that inspired this book emerged in the spring of 2010 during an otherwise typical investment advisory discussion. My client, Rick, had investment needs. Like many investors, he wanted a conservative approach (low volatility) to managing his investments. Also like many investors, he simultaneously needed growth to increase his purchasing power. An inherent conflict. Thus, Rick called me to seek guidance on how to assemble a portfolio that would best meet his goals.

But Rick wasn't just any client. Rick was my longtime friend of more than 55 years. In the eighth grade, we played soccer together. In high school, we (along with our teammates) won the 1962 Pennsylvania State Championship. June 3, 1967, we entered Navy officer candidate school in Newport, Rhode Island together.

In 1970, I left active duty to join the finance industry. Rick went on to become a career Naval officer, rising to the rank of Captain in the Naval Supply Corp and earning a master's degree in computer science at the Navy's postgraduate school in Monterey, California along the way. He also prudently saved and invested his entire adult life.

Those of us who have the benefit of lifelong friendships know how special they are, especially at Rick's and my age. We shared a significant part of our youth together. Each of us was proud to serve our country. We each appreciate the career achievements of the other. And, importantly, we tease each other over minor missteps when we were young and a few ...