@article {Jennings36, author = {William W. Jennings and William R Reichenstein}, title = {The Extended Portfolio in Private Wealth Management}, volume = {11}, number = {1}, pages = {36--45}, year = {2008}, doi = {10.3905/jwm.2008.706271}, publisher = {Institutional Investor Journals Umbrella}, abstract = {The authors assert that a private wealth manager should manage an individual{\textquoteright}s extended portfolio that contains financial assets like stocks and bonds along with non-financial assets such as human capital and future benefits from Social Security and defined-benefit pension plans. The optimal allocation of an individual{\textquoteright}s financial portfolio must recognize that it is but one part of an extended portfolio. If human capital is bond-like then, when human capital is substantially larger than financial assets, an individual{\textquoteright}s financial portfolio should be heavily allocated to stocks. Similarly, benefits from a defined-benefit pension plan or a fixed payout annuity are essentially {\textquotedblleft}bonds{\textquotedblright} in an extended portfolio. Everything else the same, individuals with such bond-like extended portfolio assets should allocate a larger portion of their financial portfolios to stocks. The article examines these and other investment implications of this extended portfolio framework.TOPICS: Retirement, portfolio construction, portfolio theory}, issn = {1534-7524}, URL = {https://jwm.pm-research.com/content/11/1/36}, eprint = {https://jwm.pm-research.com/content/11/1/36.full.pdf}, journal = {The Journal of Wealth Management} }