White Papers

Put options, investments, economy

Hedging with Put Options: A Costly Endeavor

After a decade-long economic expansion and bull market in US stocks, investors are understandably nervous about downside risk. Global economic policy uncertainty rose sharply in 2018, fueled by the threat of a trade war among the world’s largest economies. With the stock market crash of 2008-’09 a distant but still painful memory, many investors are asking about efficient ways to protect their hard-won gains of the last decade.

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Portfolio Optimization Theory vs. Practice

This paper examines the gap between the theory of portfolio construction and its practice. In particular, it analyzes some of the problems in the application of portfolio optimization techniques to individual investors. We then discuss what can be done today to compensate for the problems with the theory, and what additional work needs to be […]

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The Right Way To Manage Wealth

This article addresses important questions for the owners of substantial private wealth:
• What is the right way to manage wealth?
• What mistakes do most families make?
• How can families avoid those mistakes?

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Tax-Efficient Investment Management 2006-2014, A Case Study

This paper highlights the importance of active tax management of investment portfolios, using the results of an actual Ballentine Partners’ client as a case study. While the strategies and results described are real and verifiable, other details regarding the client have been altered to protect confidentiality. During the period covered by this study, we were able to add approximately $18.8 million of value for a $300 million portfolio (inclusive of a concentrated stock holding) through the combined impact of (1) strategically locating assets to save gift tax, estate tax, and generation skipping tax and (2) active tax management of the portfolio.

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What is Risk?

Individual investors tend to equate “risk” with loss of capital. That definition of risk may lead an investor astray and prevent the investor from reaching his or her goals. This article proposes a different definition of risk and explains how prudent management of risk is essential for meeting the investor’s goals. Investors cannot avoid risk, and there is no such thing as a “risk-free” investment.

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Estate Planning Questions and Issues to Ponder

Estate Planning Questions and Issues to Ponder

This article explores some key estate planning issues that arise in nearly every discussion about estate planning. If couples arrive in their attorney’s office having already thought about these issues, estate planning discussions will go more smoothly and couples will feel more confident in their decisions.

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Improving Investment Returns by Reducing Taxes, A Case Study

Improving Investment Returns by Reducing Taxes, A Case Study

This case study is based on an actual Ballentine Partners client family and outlines best practices for maximizing client after-tax returns using a number of techniques including asset allocation planning, asset location planning, and active tax management of portfolios.  While the strategies and results described are real and verifiable, the details of the client’s background […]

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A Breach Has Occurred...Now What?

A Breach Has Occurred… Now What?

With cyber theft often in the headlines, it might seem as though it’s not a question of whether your personal information will be compromised, but when. For example, you have likely seen CNN’s estimates that over 100 million Americans have had their personal information stolen and exposed over a one year period. This may leave […]

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Investors Profit from a Shrinking Banking System

The 2008 US Credit Crisis and resulting European Banking and Sovereign Crisis exposed major weaknesses in banking regulations and oversight. The reaction from policymakers and market participants set about sweeping reforms that will permanently alter the system as we know it. Ballentine Partners has followed these events closely, recognizing that massive regulatory change will create […]

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Setting Your Investment Goals: It’s Harder Than You Think

The right way to define your investment goals requires you to answer many important questions about your financial situation now, and your expectations for the future.  You must address the types and amounts of investment risks you are willing to tolerate.  You must also consider taxes on your investment income, inflation, investment fees, regulatory constraints […]

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prevent beign stolen

How to Prevent Being Stolen From

They are often very competent, clever, and persistent. Judging by the 70 million-plus credit card numbers they recently stole from Target, they can be quite ambitious, too. They are the crooks and hackers who lift identities, clean out bank accounts, or simply empty wallets. And while everyone is on their radar screen, those with wealth […]

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Debunking the Myths of Impact Investing

Debunking the Myths of Impact Investing

The path of development and globalization we have accelerated on for the last 300 years has brought profound advancements in health, technology, comfort, and prosperity, but today we face an ever growing array of challenges both socially and environmentally. Corporate growth and strong capital markets (i.e. stock market, banking system) have been our engines of […]

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The Business of Wealth Management

The Business of Wealth Management

This article describes important decisions we made in structuring our wealth management practice. Our purpose is to explain the decisions we made in our business and how they affect our clients. Much of what is covered here relates to the many conflicts of interest in the wealth management business and how we decided to address […]

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Wealthy but Illiquid White Paper Screenshot

Wealthy But Illiquid

The combination of risk concentration and lack of liquidity poses significant challenges for wealth management, and for the preservation of wealth. If you are the owner of a private company, a top officer, director or major shareholder in public company, a principal in a private equity, hedge fund or real estate investment firm, you could […]

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Decision Model for Non-Qualified Stock Options

Decision Model for Non-Qualified Stock Options

This paper analyzes various strategies for an individual who holds a non-qualified stock option and who desires to maximize the amount of after-tax wealth generated by the option. Contrary to most people’s expectations, assuming that the expected pre-tax return on the option is greater than zero, the optimal strategy for maximizing after-tax wealth is almost […]

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Best Practices for Protecting the Privacy of Your Family Foundation

Family foundations are required to publicly disclose sensitive information – but you can take steps to protect your privacy. Family foundations comprise nearly half of the 76,000 private foundations in the US. Every year, these family foundations are required to disclose information in mandatory filings that become public. Unfortunately, the information contained in these filings […]

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A Balanced View of the State of the Municipal Bond Market

Despite the negative drumbeat of negative press about the state of municipal finance in the United States, we believe the risk to our clients’ municipal bond portfolios is extremely low. State and local governments, feeling the impact of the economic turmoil of the past few years, are currently struggling with significant budget deficits. This has […]

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Your Spouse: Family CEO-In-Waiting

Do you have a sound plan for managing your family’s financial situation if the spouse who is in charge of those issues must suddenly assume that role? If you are like most couples, one spouse tends to take the lead in managing the family’s financial life. That spouse handles most of the discussions with financial […]

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Deep Values

Wealth Manager Magazine: “Deep Values”

Incorporating a family’s values into legacy plans requires advisors – and clients – to think about the real effects their strategies have on heirs. As advisors in multi-family office practices of family-focused wealth management firms, we have a unique opportunity to play a critical role in our clients’ lives. Our work allows us to both […]

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