Strategic Asset Allocation for Individual Investors: The Impact of the Present Value of Social Security Benefits (pp. 295-326) DOWNLOAD FULL-TEXT ARTICLE
Steven P. Fraser, William W. Jennings, David R. King

ABSTRACT
This paper demonstrates the dramatic effect of social security wealth on individuals' asset allocation. We first discuss why social security wealth should be included in portfolio asset-mix decisions. We then draw parallels between social security benefits and inflation-indexed treasury bonds to help quantify the present value of social security benefits. Finally, we show the portfolio impact of including social security wealth under several asset-mix decision rules. Excluding social security wealth from the asset mix decision results in sub-optimal portfolios. Including social security wealth provides an incentive for including more stock in the asset mix.

The Equity Index Annuity: An Examination of Performance and Regulatory Concerns (pp. 327-342) DOWNLOAD FULL-TEXT ARTICLE
Gregory A. Kuhlemeyer

ABSTRACT
The Equity Index Annuity (EIA) is a recent product development in the insurance industry. This paper details EIA design and interest crediting techniques, examines expected performance, and discusses possible regulatory concerns. Results indicate that the EIA is generally expected to perform better than a traditional fixed annuity for contract periods of at least five years, but is substantially below that of a similar direct equity purchase. EIA contracts are not appropriate for shorter-term investors when factors of risk and efficient markets are considered. The SEC is not currently regulating the EIA product, which should raise industry concern.

Financial Services and the African-American Market: What Every Financial Planner Should Know (pp. 343-359) DOWNLOAD FULL-TEXT ARTICLE
D. Anthony Plath, Thomas H. Stevenson

ABSTRACT
African-American consumers differ markedly from their Caucasian counterparts in terms of financial product preferences, product research, and investment asset portfolio composition. This study examines some of the principal differences between African-American and Caucasian households in evaluating and purchasing investment assets and explores differences in asset holdings between the two racial groups. This information can help financial planners seeking to market to the African-American community better understand this community, tailor investment information for the unique needs of this community, and render more effective service to individuals and families that comprise this attractive and growing market segment.

The Reliability of the Book-To-Market Ratio As A Risk Proxy (pp.361-373) DOWNLOAD FULL-TEXT ARTICLE
Ralph R. Trecartin Jr.

ABSTRACT
This study examines whether the book-to-market ratio consistently explains the cross-section of stock returns through time. The results reveal that the book-to-market ratio is positively and significantly related to return in only 43% of the monthly regressions. Other value/growth variables such as "Cash Flow", "Sales Growth," and "Size"; perform even more erratically than the book-to-market ratio, and are thus less likely to be viewed as legitimate risk proxies.

On Time: Contributions from the Social Sciences (pp. 375-387) DOWNLOAD FULL-TEXT ARTICLE
Barbara S. Poole

ABSTRACT
This paper provides a brief review of the anthropology and psychology literature as it relates to time, an important variable in finance. First, the paper discusses ways that individuals represent time, and introduces cultural variations in the perception of time. Then the experience of time passing, and behavioral pace, is discussed. The succession of time and the orientation toward past, present, and future, are described. The paper may provide implications for academics whose finance research is related to behavior over time.

Hedonic Investment (pp. 389-403) DOWNLOAD FULL-TEXT ARTICLE
Douglas E. Allen, Elton G. McGoun

ABSTRACT
Investing and consuming may not be so different as traditional economic theory has understood them. The consumer research literature has begun to view consumption not simply as rational decisionmaking, but as a more multi-sensory activity in which emotion and fantasy play important, if not essential, roles. This new perspective has been extended by Holt (1995) in a matrix of metaphors in which consumption can be viewed as an interaction with objects and/or other persons as an end in itself and/or a means toward toward other ends. This paper theorizes how this matrix might apply to investment and uses a literary analysis of the best-selling The Motley Fool Investment Guide to examine whether or not our knowledge of consumers might in this way inform our understanding of investors.