The Only Guide to a Winning Investment Strategy You'll Ever Need: The Way Smart Money Invests Today [Hardcover]

Larry E. Swedroe (Author)

Book Description

Release date: December 23, 2004 | ISBN-10: 0312339879 | ISBN-13: 978-0312339876 | Edition: Revised and Updated

Investment professional Larry E. Swedroe describes the crucial difference between "active" and "passive" mutual funds, and tells you how you can win the investment game through long-term investments in such indexes as the S&P 500 instead of through the active buying and selling of stocks.

A revised and updated edition of an investment classic, The Only Guide to a Winning Investment Strategy You'll Ever Need remains clear, understandable, and effective. This edition contains a new chapter comparing index funds, ETFs, and passive asset class funds, an expanded section on portfolio care and maintenance, the addition of Swedroe's 15 Rules of Prudent Investing, and much more.

In clear language, Swedroe shows how the newer index mutual funds out-earn, out-perform, and out-compound the older funds, and how to select a balance "passive" portfolio for the long hail that will repay you many times over. This indispensable book also provides you with valuable information about:

- The efficiency of markets today
- The five factors that determine expected returns of a balanced equity and fixed income portfolio
- Important facts about volatility, return, and risk
- Six steps to building a diversified portfolio using Modern Portfolio Theory
- Implementing the winning strategy
- and more.

Product Details

• Hardcover: 352 pages
• Publisher: St. Martin's Press; Revised and Updated edition (December 23, 2004)
• Language: English
• ISBN-10: 0312339879
• ISBN-13: 978-0312339876
• Product Dimensions: 6 x 1.1 x 9 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 4.7 out of 5 stars  See all reviews (50 customer reviews)
• Amazon Best Sellers Rank: #81,660 in Books (See Top 100 in Books)
  • #14 in Books > Business & Investing > Investing > Mutual Funds

Editorial Reviews

Review

"Larry Swedroe answers a lot of questions investors ask. If you don't understand why your stocks behave the way they do, this is your book."
--Jane Bryant Quinn, Newsweek columnist, author of Making the Most of your Money

"Larry Swedroe is right on the mark...Those who follow his objective and expert advice will be rewarded accordingly."
- John C. Bogle, founder and former chairman of The Vanguard Group

"The investment book of the year!"
- Robert Sobel, Professor of Business History, Hofstra University

About the Author

Larry E. Swedroe graduated from New York University with an MBA in finance. He is the author of What Wall Street Doesn't Want You to Know, Rational Investing in Irrational Times, and The Successful Investor Today. Swedroe lives in St. Louis, Missouri, where he is a principal in the firm of Buckingham Asset Management.

Product Details

• Hardcover: 352 pages
• Publisher: St. Martin's Press; Revised and Updated edition (December 23, 2004)
• Language: English
• ISBN-10: 0312339879
• ISBN-13: 978-0312339876
• Product Dimensions: 6 x 1.1 x 9 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 4.7 out of 5 stars  See all reviews (50 customer reviews)
• Amazon Best Sellers Rank: #81,660 in Books (See Top 100 in Books)
  • #14 in Books > Business & Investing > Investing > Mutual Funds

More About the Author

Larry Swedroe is principal and director of research for Buckingham Asset Management, LLC, a Registered Investment Advisor firm in St. Louis, Mo. He is also principal of BAM Advisor Services, LLC, a service provider to investment advisors across the country, most of whom are affiliated with CPA firms. Previously, Larry was vice chairman of Prudential Home Mortgage. Larry holds an MBA in finance and investment from NYU, and a bachelor's degree in finance from Baruch College.

Most Helpful Customer Reviews

55 of 56 people found the following review helpful

5.0 out of 5 stars Believe the title--this is the only book an investor needs April 24, 2005

By Edward Wolfe

Format:Hardcover

No doubt you've heard many times something to the effect: "this is the only book you'll need to learn how to invest." Well, this time believe it-this is the only book you'll need. If ever we reach the point where we have private accounts in Social Security, this book should be required reading for everyone before they undertake their private account.

I note that all of the reviews on Amazon of Larry's latest book are positive-and with good reason. My endorsement of this book is twofold: (1) it is the strategy that I use, and (2) I use this book as my main text in a college investments course called Applied Investments, where I teach students how to take control of their own personal investments and not be dependent on brokers/financial advisors.

Being a Finance professor I was well aware of the evidence regarding active management v. passive investing, and when I first began looking for books for my course, I did a lot of reading of books by such people as William Bernstein, Burton Malkiel, and John Bogle of Vanguard-all of whom are ardent proponents of passive investing. All of these people (as well as others) regularly cited Larry Swedroe's books and articles, so I decided to go straight to the horse's mouth, so to speak. What a great find!

Mr. Swedroe writes with a clarity that is rare, especially in Finance. In addition, he backs up all of his positions with academic research, which of course, makes it an excellent book to use in an academic setting. But don't be put off by this-he doesn't let the research discussions get in the way of what he's trying to explain. He takes you through the evidence and then shows you exactly how to earn market rates of return through the application of passive investing, asset allocation, and rebalancing.... It's all in this book. If you follow what he teaches you to do, your financial house will be in order, and at the end of your investment horizon, your will be much better off. Read more ›

40 of 41 people found the following review helpful

4.0 out of 5 stars Strong practical advice; don't discard the book because of it's title October 9, 2006

By Anton

Format:Hardcover

Despite its preposterous title (how can a financial advisor with any claim to rationality be so self-assured), this book is good read for the average investor. It has one mediocre, one average and one excellent sections. The last section alone (see more detail below) is worth the book's price!

The book's three sections cpver material as follows:

Section 1: making the case as to why short-term trading, trying to time and/or beat the market by following pundits' advice, etc. is a "loser's game" - is, in my opinion, WEAKEST part of the book - it is full of quotes that are redundant to the point of almost being self-undulgent in stressing that only a small fraction of investors would ever beat the returns of broad market indices, such as the S&P 500. Those convinced of this philosophical view can skip this section altogether....

Section 2: discourse on efficient market and modern portfolio theories -- as popular expositions on efficient markets and portfolio diversification go, Swedroe does an AVERAGE job, covering the essentials on risk and return (for better long-term risk/retun analysis see "Stocks for the Long Run" by Jeremy Siegel; for better discourse on diversification, see "The Intelligent Asset Allocator" by William Bernstein)

Section 3: Here is where Swedroe shines - he illustrates the benefits of modern portfolio theory by showing long-term (20 years) risk return of 3 hypothetical portfolios with different degree of diversification between asset classes (large- and small-cap US and international stocks and US bonds);the author further lays out a rational systematic approach towards building a diversified portfolio, based on investor's liquidity contraints, comfort with international and tracking error (deviation from most popular US stock indices); management of assets in a taxable and non-taxable accounts is also well covered, as are practical strategies, as index investing, rebalancing, dollar-cost and value averaging.

The book also has 9 Appendixes, some of which, such as a discussion on "recommended investment vehicles and sample portfolios" go in as much a detail as covering the strategies of specific mutual funds, which the author recommends.

All-in-all - there is much useful practical advise here for the average investor; not much for the more sophisticated reader. Read more ›

32 of 34 people found the following review helpful

5.0 out of 5 stars Solid advice that runs contrary to what makes the most noise March 19, 2005

By Thomas Duff HALL OF FAMETOP 500 REVIEWERVINE™ VOICE

Format:Hardcover

It's a shame to think of how much money I've lost "investing" in the stock market over the years. I wish I had read the book The Only Guide To A Winning Investment Strategy You'll Ever Need by Larry E. Swedroe about six years ago...

Chapter List: Why Individual Investors Play the Loser's Game; Active Portfolio Management Is a Loser's Game; Efficient Markets I - Information and Cost; Efficient Markets II - Risk; The Five-Factor Model; Volatility, Return, and Risk; Six Steps to a Diversified Portfolio - Using Modern Portfolio Theory; How to Build a Model Portfolio; Index Funds, Passive Asset Class Funds, and ETFs; The Care and Maintenance of the Portfolio; Implementing the Winning Strategy; Summary; Appendices; Notes; Glossary; Recommended Reading; Acknowledgments; Index

The main thrust of this book is how to use a passive approach to investing to consistently get market or above-market rates of return. Swedroe makes an extremely strong case for the use of index funds as the primary investment tool. He does this by comparing the average performance of actively managed funds, and shows statistically that in nearly all cases, it's impossible to consistently beat the market. If you look at selected years, it's possible to "beat" the market, but over the long run the passive approach will always win. And when you figure in the tax advantages and the administration costs of a churned fund, the gap between active and passive fund management is even greater.

If you are an investor, it's worth reading... Even if you don't agree, it will give you some food for thought.