Customer Reviews

The Only Guide To Winning Investment Strategy You'll Ever Need: Index Funds and Beyond--The Way Smart Money Creates Wealth Today

5 star:		(55)
4 star:		(13)
3 star:		(1)
2 star:		(0)
1 star:		(1)

 

 

If you are an investment neophyte or an index fund guru, this book will expand your knowledge. The research is in and the results are unequivocal, indexing beats active management over time and by a significant amount. The only people who contest the evidence are active fund managers who don't want to lose their paying customers. Larry Swedroe provides the evidence in a fully documented book that explains not only why index investing outperforms active fund management, but also how you can put the information to work for you. In eleven easy to read chapters, Mr. Swedroe explains Modern Portfolio Theory, research that won the Nobel Prize for economics in 1990. But this isn't an economics book. It's a book written for the layman that explains index mutual fund investing and how to do it most effectively. Information you don't know can cost you dearly. Be an informed investor and stop paying high fees to fund managers who can't outperform their comparable indexes. Read the book today, you can thank me later.

If you enjoy spending lots of time researching mutual funds and being charged high costs (compared to index funds)to own them...and love to get stressed out chasing last years winners, then I strongly suggest NOT reading this book. This book contains compelling arguments on why investing in 'index funds' is really all you need to know about investing. I've read many books on mutual funds, especially index mutual funds, and this book, without a doubt, is the superior writing. And, although the author is passionate in his effort to educate, the content is straight-forward and easy to understand and relate to. Holding a master's degree in economics is not necessary to appreciate this 'no-brainer method of investing' the author conveys to the reader. I've read the book twice as well as given it as gifts! Again, there are many books on the subject of 'Index Mutual Funds', and believe me, this one is by far the best. This book hammers-home the strategy that Index Funds should be the foundation of every investment portfolio. This was the first book on index funds that I bought/read and subsequently purchased several more books on the subject before I realized that I wasn`t going to find another book as good as this one.

The book is an easy read and can be understood by beginners as well as the experienced. Beware that the author does over state the advantages of indexing and passive investing to some degree--take note of "assumed" realized gain example on page 48--active managed fund of 8% in capital gains vs 1% in passive. If he actually looked at some annual reports of actual mutual funds, the difference between active and passive funds in the tax efficiency area is much less.

The author goes on explaining the higher historical returns of smaller companies on page 120. However, it has failed to remind that the much higher trading expense noted on page 94 must be accounted for thus the difference is less than dramatic.

The book could have discussed in more detail how the weighting of the funds for proper diversification used on sample portfolios from pages 153-160 was determined. He accused market timers for data mining--back testing for patterns yet these portfolios rely to some degree on value stocks outperforming growth stocks over the long run.

The worst criticism is that the book is biased for use of DFA funds--thinly disguised marketing of his own firm who Buckingham Asset Management which is one of the few firms which handles these funds. As noted, these funds are available only through select fee only advisors or through pension funds. What it failed to mention is that most fee only advisors only take clients with at least $100,000 to invest and for those with less than $500,000, the fee is typically 1% per year. This is addition to DFA fund's own expense of about 0.6% making them effectively a loaded fund.

I agree DFA funds themselves are very well structured line of products. However, the difference in expense and the seemingly endless addition of new indicies makes me feel that their small edge is getting lost. There's a fairly good debate on indexfunds.com on DFA vs Vanguard which is worth a read before enlisting an expense manager.

The author took incredible efforts to discredit professional fund managers for their mediocre performance of expensive active management. Part of the reason was that managers tend to drift away from established styles after being frustrated from recent underperformance. But the author defends fee only advisors that they can add value by making sure you follow your own strategy yet cautions that the investor should retain the last word. The temptation for the advisor to come up with a "better" plan while you're investing in an established strategy exist. The advisor's job is to make sure the investor doesn't make the mistake of drifting in style but also has the opportunity to influence a style drift. All the effort of promoting low cost investing approach seem to have gone to waste the moment the author is subtly pushing fee only advisor.

Author attempted to discredit Professor Jeremy Siegel's claim that small cap stocks do not outperform large cap stocks if an 8 year stretch is removed from a 70 year record on page 119. The author used a completely different index than Professor Siegel. It's still debatable whether there was a simple abberation in historical return or not especially considering the added trading cost of smaller companies.

The numbers seem to be exagerrated a bit by pulling things out of context so be careful with any numeric claims and draw your own conclusion only after doing more research.

Despite these problems with the book, it is a good read. It explains the merits of passive investing, the principals of diversification, why fundamental/technical analysis aren't necessary or may even be counter productive, etc.

I highly recommend reading Jeremy Siegel's "Stock for the Long Run."

The title put me off, but the rest of the book is a solid turn-on. This book is clear and informative. It is built on mounds of evidence. There is no area of American life more prone to exaggeration than the get-rich-investment area, and Swerdoe exposes the hype for what it is. His book hammers away at a few key points, the main one being that actively-managed mutual funds--and ownership of individual stocks--just doesn't make dollars or sense compared to ownership of passive mutual funds. It's impossible to believe in the actively-managed mutual fund myth after finishing the book.

After reading Larry Swedroe's excellent second and third books I felt compelled to return and read this, his first book. My urge to do so has been more than adequately rewarded by this excellent text.

Larry Swedroe lays strong foundations by focusing on three major areas. First, he summarizes the results of several studies indicating that passive investment strategies outperform, over time and by a wide margin, active investment management. Second, Mr. Swedroe offers the individual investor a through overview of Modern Portfolio Theory and its subset, Efficient Markets Theory. Third, Larry provides a guide to the construction of a portfolio and discusses the roles investment advisors may undertake for the individual investor.

While some of the material in this first book is duplicated and updated in the second and third books, I recommend all three of these texts to individual investors. Larry Swedroe possesses the knack to take recent academic research and pass it on in an understandable, common sense manner to the many individual investors who do not possess advanced degrees in statistics.

My own library of "good books" on investing has grown to nearly 20 different texts. All three of Larry Swedroe's texts make my "good book" list. (I have rejected over 100 other texts and not included them on my "good book" list.) I highly recommend all of Larry's books, together with additional texts by Burton Malkeil, Peter Bernstein, John Bogle, Bruce Temkin, Roger Gibson and others. Larry's three books greatly assist the individual investor to build a solid base of knowledge to understand what works (and the many things that don't work) in investing. I highly recommend this book, and all three of his books, as key additions to every serious investor's library.

Along with the latest edition of Charles Ellis's book (Winning the Loser's Game : Timeless Strategies for Successful Investing), Larry Swedroe's book will drive you away from actively managed mutual funds and toward passively managed index (and more sophisticated asset-class allocation) funds. Swedroe builds a convincing case, not only by marshaling the extensive academic evidence showing that active stock pickers do not persistently beat their passive benchmarks over time, but also by demonstrating that you CAN beat the "market" by allocating your passive investments to achieve the optimal return for the risk you are willing to bear. He also provides specific portfolio recommendations for several standard risk levels. My only criticism is that this book -- like nearly all investment books with the exception of Ellis's -- is so heavily padded with anecdotal fluff that it interferes with a reader's capacity to grasp the essentials quickly. Even so, the book is well worth the price. It may permanently alter the way you think about investing.

What a revelation! I've been investing for years and managed to get what I though was a good return until I looked at the results possible in this book (and I've read a lot of investment books!)

The suggestions on creating a "model portfolio" just make sense. The documentation and analysis is very good and well-supported with facts and figures.

I suspect that Larry Swedroe has few friends on Wall Street because he does an effective job skewering several myths and mythmakers - you'll enjoy his analyses of these "forecasters" results.

I recommend this book particularly if your porftfolio has failed to beat the S&P 500 for the last five years or so.

Although the author provides a thorough description of the research and theory of MPT, he provides the average investor with no tools to implement the proposed strategy except through advisory firms such as the author's. This introduces an obvious question of bias in the way data is presented and in the confidence the reader should have in the the methodology. It would have been more convincing if the author had provided a practical way for the average investor to use the suggested techniques, with examples of funds other than DFA. The book may be most useful for wealthy investors who are likely to meet the assest minimums advisory firms would require.

Larry Swedroe does a great job explaining the concept of the Modern Portfolio Theory and using index funds in a passive way opposed to a fund dependent on a manager. The first part of the book supports why an investor should avoid the trade magazines,newsletters,and MR. "I know it all" who ends charging you the higest fees and commissions.
Chapter 7 is worth the price of the book since this is where Swedroe shows the best ways to built a portfolio.
I had some concerns and emailed the author and he responded the very next day(can't beat that). I've read some other books on investing but this one like a good movie has had me thinking ever since.

In a clear and concise manner, Swedroe shows, no, convinces the reader, of the superiority of asset allocation and passively managed index funds.

With complete explanations and interesting examples the reader is taught the basics of the efficient market and modern portfolio theory. Using the principles described in this book, an individual investor can both "eat well and sleep well", that is, can achieve excellent investment returns while actually lowering the risk in his portfolio.

Even if one chooses not to implement the complete strategy outlined by Swedroe, the book offers insights into investing that cannot help but improve portfolio performance.

This book is suitable for the beginning investor as well as the sophisticated person that makes his living from the market. Read it!