The Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors, + Website

Notes

¹ In other words, until the end of 2012 the exemption is $5 million. After 2012 it is scheduled to drop to $1 million.

² This default position would not make sense for a family who had only temporarily moved to an uninvested position, perhaps as the result of terminating their investment advisor and moving temporarily to cash. (Note that terminating an advisor can often make sense; moving to cash—as opposed to keeping the invested positions intact—will rarely make sense.)

³ It is surprisingly easy to know intellectually when markets are reaching overvalued levels, because we know a great deal about corporate earnings and about what investors are willing, over longer periods of time, to pay for those earnings. What we can't know is when valuation anomalies will correct themselves. That is because extreme over- and undervaluations are caused by investor psychology, not by corporate earnings.