An effective asset pricing model should provide consistent recommendations for asset pricing, asset allocation and measuring risk-adjusted performance (or the “three facets of investing”). This paper incorporates three critical realities of investing (i.e., that investors have many...

With a rapidly aging population, Portugal faces some serious pension challenges including a Social Security system which is under pressure, and pension benefits gradually approaching levels that will require individuals to supplement Social Security with private savings. In addition, Portugal...

Goals-based investing (GBI) increasingly is replacing traditional portfolio approaches as investors realize the failing of modern portfolio theory (MPT). But the techniques being suggested for GBI still are rooted in complex, risky, error-prone mathematical models based on MPT, well beyond the...

Financial illiteracy is widespread and leads to bad financial decisions. Individuals cannot answer basic questions about inflation, compounding, and diversification. This paper argues that financial literacy programs be complemented with new financial instruments that embed goal-specific...