Review of Streetsmart Guide to Managing Your Portfolio (Hardcover)

I was trying to get a book that includes a great deal of modern portfolio theories and some practical examples to show me how to allocate my asset in a more scientific and knowledgeable way. This book has cached my eyes and I was very satisfied by the amount of knowledge I learned from it in a relative short period time. Here are some pro and con I want to mention about this book:

Pro
. Great amount of financial knowledge covered (asset allocation, risk analysis, etc)
. Easy to understand (practical examples present)
. Do not need to spend too much time on it, everything was concisely written (only 250+ pages)
. CHEAP comparing to other financial books

Con,
. Though ideas were clearly crossed inside the book, but some parts are poorly written.(Not a big deal, but still)

Conclusion: a MUST BUY for those entry level or intermediate level investors who want to learn modern portfolio theories in a relative short period of time.



Click Here to see more reviews about: Streetsmart Guide to Managing Your Portfolio (Hardcover)

Review of The Bogleheads' Guide to Investing (Hardcover)

I read this book quickly shortly after I got it, and I was blown away. Many reviewers pick this as a book for "beginners", but I don't agree with that.

My background: I have read (and own) dozens of investment books. I have subscribed to many newsletters (including Morningstar's, which is decent but unnecessary after you read this book). I have owned many individual stocks and for the last 2-3 years before I got the Boglehead religion I was lucky and beat the market averages buying individual stocks (although for most of my life I've lagged far below the market). I opened my first brokerage account in 1990, and I've been self-directed ever since. I've had 400%+ years as well as -70% years. I've even been in the top 100 virtual mutual funds on Marketocracy (out of 70,000), and I've written custom software to analyze the daily performance of the top 1500 stocks.

Having said all that, I wish that I had followed the investment principles laid out in this book from the very beginning. I would have a lot more money than I do now.

Before reading this book, I already had all my retirement money in Vanguard index funds. So you would think, end of story, you're already a believer. NOT SO! While I started out using the Target Retirement funds, which allocates your money properly for your age, I slowly deviated from those funds into the higher risk emerging markets index fund, because that fund was doing so well. It's easy to read this book and say, "oh that makes sense", stay the course for a year or so, then get seduced by the hot performance of a particular sector and lose your way. For these principles to work, you really have to apply them relentlessly, and I think that it takes either someone with an iron discipline or someone who's acquired "experience" in the market (i.e., losses that hurt) to recognize the wisdom of this book and follow it.

Years ago, I read John Bogle's book on index funds, and I agreed with the logic of what he was saying. Then I proceeded to ignore it for most of my investing career before I really "got" what he was saying.

Perhaps, if you're a beginner, you'll follow this book and avoid the pain and losses. The principles are easy enough to understand. In fact, if you want to save the price of the book, simply go to Vanguard, pick your retirement date, buy a "Target Retirement" fund for that date, and you're done. That's pretty much what the book tells you to do.

BUT, you'll need the book (and, in my opinion, the "experience" of following the 99% of the misleading advice out there) to really understand why this is the real way to go. You almost have to read this book every year as an antidote to the temptation that assaults you nonstop from Wall Street and CNBC and all the financial magazines.

If you're a beginning investor, this is it. This book is the mother lode. You can stop looking. Unfortunately, it may take you 10-15 years and many large losses to realize this (as I had to do), but take it from me (some random anonymous person on the Internet), this is the REAL DEAL.

Knowing what I do now, if at age 21 I'd had my choice of $2,000,000 or the wisdom to understand the concepts in this book, I'd choose wisdom. Here are two examples from this book to illustrate why. On page 13 of this book Jack Bogle relates a letter that he received in early 2005 about someone who's been investing with Vanguard for about 30 years, and whose portfolio had grown to over $1.25 million, but he'd never made more than $25,000 in any year in his life. Although they knew nothing about his specific investing history (maybe he just got lucky? we don't know), this figure is attainable investing $600 a month in a Vanguard stock index fund over 30 years.

On the other hand, according to an NBC News report related on page 180 of the book, more than 70 percent of lottery winners exhaust their fortunes within 3 years.

So, clearly, doing the right thing is going to have a huge impact on how much money you end up with.

Even the most experienced investors will benefit from this book (and in fact, may benefit more) by simplifying their portfolio. The chapters on asset allocation and taxes are extremely insightful, even to non-beginners.

After reading this book, I immediately re-balanced my Vanguard portfolio to better fit my age group, and to lower the risk that I was taking.

Even as an "experienced" investor already in Vanguard index funds, I learned something actionable that I was immediately able to apply. If you consider yourself an "experienced" investor, you will also benefit from reading this book. I highly recommend it. My ENTIRE retirement portfolio is in Vanguard index funds, allocated in the recommended amounts, so this is not an idle recommendation.

Read it and live it.

(Just so you know, I have never visited the Boglehead web site, and I have never corresponded with any of the authors. I'm just an uninterested third party who's a big fan of this book).




Click Here to see more reviews about: The Bogleheads' Guide to Investing (Hardcover)

Review of Fast Profits in Hard Times: 10 Secret Strategies to Make You Rich in an Up or Down Economy (Hardcover)

Fast Profits in Hard Times well worth the money. It highlights ten successful strategies for wealth accumulation that work in rising or falling economic conditions. By wealth accumulation I mean money earned on investments. You still need seed money to start the process, of course.

Everyone knows it's easy to make money on investments when the stock market is bullish. Buy low and sell high. Even the worst mutual fund manager can't help but look like a star under this scenario. But what do you do when the bears come out? How do you generate a healthy return when stocks are dropping? This book helps answer these nagging questions.

The text is less than 250 pages, so it's an easy read. The style of writing is direct; it's like Jordan E. Goodman is sitting across the table from you in a conference room. There are ample call-outs and highlights to make sure you catch and remember the most important points of each of the ten chapters.

My favorite chapters are the ones on high-yield equities, dividend reinvestment programs (DRIPs), bonds and the mysterious foreign exchange. The chapter on stock options is solid, but I think it underemphasizes the risk associated with these leveraged investments. A summary chapter at the end of the book on risk vs. return is something I longed for. Also I found the chapters on tax liens and below-market-value real estate and trusts to be a bit too timely. It seems like everyone is pushing these vehicles nowadays in the foreclosure-rich environment. But make no mistake; the chapters are well-written and chock-full of information.

I'm still chuckling about the chapter on investing in vending machines.

Armchair Interviews says: For the novice investor, Fast Profits in Hard Times is a goldmine with ten solid veins. For experienced investors, there are some good tidbits.



Click Here to see more reviews about: Fast Profits in Hard Times: 10 Secret Strategies to Make You Rich in an Up or Down Economy (Hardcover)

Review of The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets (Hardcover)

Most investment books are disappointments because of one or more of these characteristics:inflated (would have been a good magazine or journal article, but doesn't deserve a book);obscure because information is withheld (in order to sell a newsletter, software, or service);obscure because it is poorly written;subjective (not data driven);or just plain wrong.

The Ivy Portfolio has none of those problems."Not bad" isn't the same as good, but this book is good.It is full of ideas and useful information;the disclosure is extensive, allowing reproducible results;it is well written;it is data driven;it is right based on the historical evidence, and I think the recommendations will prove to be robust.

Under the theme of learning best practices from the most successful investors, Ivy has not one but three big ideas:do what the "super endowments" do (diversify into additional asset classes);employ systematic timing to reduce risk;follow the best investment managers.A non-professional (but responsible) investor will understand how to do these things after reading Ivy, and I believe will do much better than buy-and-hold management (or in practice, "winging it").It won't take much time or special resources to manage an Ivy Portfolio.The companion website, www.theivyportfolio.com should be a good adjunct.

Any concerns?I suggest that more discussion about pitfalls in choosing ETFs to implement the less familiar asset classes would be good.More importantly, the underlying idea is patterned after endowments and hedge funds.The typical individual investor has a time horizon and risk profile driven by the life cycle:accumulation, transition, decumulation (systematic withdrawal to provide retirement income).Individuals benefit from investment volatility early in their savings career, yetvolatility is treacherous for retirees, particularly in the early years of retirement.Endowments don't die.Addressing possible mismatches between management based on institutional models and the individual's situation would be helpful.Academics and quants might look for discussion of the statistical significance of the findings here, but I am satisfied with the case the authors make for the economic significance of their ideas.

Bottom line:a curious or thoughtful investor will find this book well worthwhile.




Click Here to see more reviews about: The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets (Hardcover)