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10 of 11 people found the following review helpful:
5.0 out of 5 stars
A knowledgable and proactive approach about finances, November 2, 1998
This review is from: The Prudent Investor's Guide to Beating Wall Street at Its Own Game (Hardcover)
The authors deliver an academically proven investment process for the average investor who is serious about preservation of capital and steady long-term growth. It isn't about chasing performance, outdoing somebody else, or outguessing the market. They explain ways to quantify and reduce risk and volatility throught effective diversification, and to maximize investment returns through strategic asset allocation using institutional, or asset-class/index, mutual funds. Using these strategies, investors, regardless of size of their wealth, can answer the fundamental question of which asset classes to use and in what proportions, with respect to the amount of risk they are willing to accept. Risk management requires managing expectation. Readers learn how to define their risk tolerance level based on their return objectives, as well as constraints, such as time horizon, liquidity needs, and available funds. Learning these easily understood concepts will put an end to the myths and mysteries of financial investing. This knowledge is key to overcoming the procrastination that is a result of the fears associated with unknown risks. Bobby Glass, CLU, ChFC, CFP Acorn Financial Services, Inc. Fairfax, Virginia
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9 of 10 people found the following review helpful:
5.0 out of 5 stars
One of a kind, August 29, 2001
This review is from: The Prudent Investor's Guide to Beating Wall Street at Its Own Game (Hardcover)
There is a huge mismatch between what is known by finance professionals and academics, and the literature that is generally targeted at retail investors. Forty years after the economist James Tobin set out his Separation Theorem disposing of the 'interior decoration' approach to investment (a little bit of growth here, a value stock there, not forgetting some fun on technology stocks), financial advisers are still getting away with peddling truly outlandish and superstitious notions. (My personal favourite among these fallacies is the notion that 'dollar-cost averaging' is a sensible and risk-averse approach to investing. Exactly the opposite is true.) In short, investment advice aimed at the retail investor often does far more harm than good. This is one of the very few books aimed at retail investors that does more good than harm. Indeed, it does a lot of good, by explaining in a non-technical but non-patronising way the essentials of modern portfolio theory (a discipline that sees investment as a process of risk management rather than of 'picking winners'), and advises on cost-effective ways to put them into practice. Retail investors looking to make a killing on the stock market by day-trading should take a deep breath, forget everything they once believed, throw away all their market tip sheets, and buy this book instead. Among its many virtues, this book will ensure that they no longer *worry* about what the stock market does - the first step to getting a happy and fulfilled life. Strongly recommended.
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6 of 8 people found the following review helpful:
5.0 out of 5 stars
The Best Investment Strategy Book you will read., June 22, 2002
By A Customer
I have spent about two years researching financial strategies by getting input from top tier professional advisors, perusing web sites, and reading books. Of all the information I've gotten, this book provides the most concise and effective approach to how to allocate your investment funds. What you will learn through this book (backed by academic research primarily by the University of Chicago): 1) An overview of modern portfolio theory, which states that there is an optimal risk/reward curve that allows you to determine the appropriate mix between stocks and bonds for any given expected level of return or tolerance for risk. 2) Regardless of your tolerance for risk or desire for reward, the only thing that changes is the overall % allocation between stocks and bonds. When any investor looks at stocks, they should have the same makeup of stocks in their porfolio (international, large cap value, small cap, etc.). The difference between more and less agressive investors is that the stock composition will be a bigger piece of their pie. 3) Statistical analysis that gives strong proof that index funds ... beat mutual funds handily over the long run by several percentage points. This book has provided me with the best framework for investing. It's a little redundant (as most informational books are), but well worth the read. I've purchased many copies of it and given them to friends and family.
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