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Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence [Kindle Edition]

James Glassman
3.0 out of 5 stars  See all reviews (8 customer reviews)

Kindle Price: $9.99
Sold by: Random House LLC

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Book Description

How can you construct a financial investment strategy to protect yourself … yet still get the growth to ensure a solid financial future and comfortable retirement during these turbulent times?
 
By building an investing safety net that gives you the gains needed for growth – though more modest than those of past years – but protection against the downside.  So when turbulence strikes again – and it will – you won’t re-live the financial nightmares of recent years when portfolios and 401Ks were devastated.
 
Jim Glassman provides the specifics you need for shrewd asset allocation, specifically:
 
  • Reduce stock ownership. For those stocks you do own, ensure they meet one of these criteria: pay dividends; are low-priced and from industries of the future; or companies based in aspiring nations such as India, Brazil and China.
  • Make a substantial investment in bonds, especially US Treasury TIPS bonds and corporate bonds
  • Hedge against decline by owning a bear fund that shorts the US economy.
  • Own funds based on other currencies, thus protecting yourself against the potential declining value of the US dollar.
  • And consider derivatives. Yes, derivatives!
 
Specific stock, bond and fund recommendations and ample portfolios then provide the starter ideas for properly balancing a portfolio.
 
And the 5 principles and 18 specific rules of “the new rule book” help keep “animal spirits” in check when fads and news flashes provide the temptation to make rash investing decisions that will be quickly regretted.


From the Hardcover edition.


Editorial Reviews

Review

“Investors face risks never before experienced.  Safety Net by Jim Glassman is essential reading for all who wish to protect themselves from the almost totally unpredictable markets that lie ahead. This is a compelling and comprehensible book that investors fail to read at their peril.”
--Arthur Levitt, longest serving chairman of the SEC

  “Jim Glassman’s new margin of safety strategy shows you how to achieve solid investment gains with modest risk in a volatile global economy.  It’s a smart and sober plan for investors of all ages and means.”
--- Knight Kiplinger, Editor in Chief, Kiplinger’s Personal Finance and The Kiplinger Letter


From the Hardcover edition.

About the Author

JAMES K. GLASSMAN has been writing about investing and the economy since the mid-1970s. From 1993 to 2004 he wrote a syndicated column on investing for the Washington Post. He was also the first investing columnist for Reader's Digest and now writes a monthly column for Kiplinger's Personal Finance. From 2008 to 2009 he was the U.S. Under Secretary of State for Public Diplomacy and Public Affairs and is currently executive director of the George W Bush Institute, the nonpartisan think tank affiliated with the George W Bush Presidential Center. Glassman is also the host of Ideas in Action, broadcast over more than 100 public television stations. He is the author of two previous books, Dow 36,000 and The Secret Code of Superior Investor; and  his articles have appeared in many publications, including The New York Times and The Wall Street Journal

Product Details

  • File Size: 280 KB
  • Print Length: 210 pages
  • Publisher: Crown Business (February 22, 2011)
  • Sold by: Random House LLC
  • Language: English
  • ASIN: B004C43F3E
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Not Enabled
  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #1,299,398 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
46 of 49 people found the following review helpful
2.0 out of 5 stars From the Co-Author of the 1999 Book, "Dow 36,000" ... February 22, 2011
Format:Hardcover|Verified Purchase
This is the 45th review I've written, and it represents just the first time I've awarded only two stars. I'm usually an easy grader, but everything has its limits, as I hope to make clear in a moment. First, however, I suggest that to get a feeling for author James Glassman's previous insight regarding investment timing and risk control--and for a sense of the effects Glassman has had on his earlier readers--read the customer reviews of his 1999 book, "Dow 36,000." As you'll see, it's not a very pretty sight. That book, written near the height of the tech-stock mania in the late 1990s, didn't encourage investors to be cautious. Rather, after years of far above-normal stock market returns (really, amidst a stock market bubble), it painted an extremely lofty, aggressive target of Dow 36,000--if only investors would see risks as minimized as Glassman did. Now, in 2011, after about 10 years of miserable stock market returns, Glassman has turned conservative. Whereas Glassman's 1999 book might have served you well if he had written it 10 years earlier (in 1989), his 2011 book, "Safety Net," might have helped investors if he had written it 10 years ago. But he didn't. Regarding Glassman's latest book, the jury will be out for a number of years, but investors rightfully should ask themselves whether he has again managed to close the proverbial barn door well after all the horses have left.

I'm no pessimist. Over the long term stocks perform pretty well, but if you start from a point of above-average stock prices (like the late 1990s), chances are you'll earn worse than typical (historical) stock returns. That was Glassman's 1999 mistake, which he (sort of) acknowledges in his latest book. He claims that his 1999 book was "meticulously documented" and "in the mainstream.
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13 of 13 people found the following review helpful
1.0 out of 5 stars There's Better Investment Advice Out There February 24, 2011
Format:Hardcover|Verified Purchase
This is definitely "investment advice lite" in the sense that, while some of his prescriptions are directionally correct, they are so general as to be outright dangerous to your wealth. "Buy Bonds" because, to paraphrase, "stocks are riskier than I thought because stuff happens" is one of the key precepts. Another is "hedge your equity exposure" through inverse ETFs and put options. Basically, there is no further guidance. So Glassman ignores any complexities like 1) capital losses on bonds of long duration in a rising interest rate and inflation environment; 2) a bear market environment for bonds which many forecasters including Bill Gross (who has the largest vested interest in the world apart from Ben Bernanke and Geitner in a bull market for bonds) are predicting; 3) the insidious effects of daily mark to market on inverse ETFs; or 4)how you value options and manage a hedging portfolio. Similarly, there is no context provided in terms of understanding how inflation can erode the value of the bond-heavy portfolios that he is proposing.

What's worse....he repeats the same intellectual fallacy of Dow 36,000: "returns on bonds [it was stocks the last time] have outperformed over the past XX years, therefore invest in bonds [stocks last time]." Well, what happens when people follow that advice? The excess returns observed in the past are eliminated by everyone piling in. Is Glassman really so dense that he still doesn't understand that over time markets converge to trend so that periods of excess performance are followed by underperformance? Trees do not grow to the sky, Mr. Dow 36,000.
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6 of 8 people found the following review helpful
Format:Hardcover|Verified Purchase
Glassman's book provides a calm, soothing, and not uninteresting decontamination treatment for those who carry intellectual infections from longtime amateur exposure to the financial markets - particularly boomers who have carried ideas from our 20s, 30s and 40s into the 21st century. His authority is enhanced by the fact that he too has undergone this decontamination process himself, and in public, and has now learned to think in different ways than he did - we all did - in the 80s and 90s.
As an amateur, I won't even try to paraphrase his advice, but I can point out a few salient features. First, Glassman has absorbed the lessons of Taleb's "black swan" ideas in a prudent non-apocalyptic way. Second, his self-defense strategy is not a straitjacket - for those who want it, Glassman's method still permits a great deal of the fun of active account management. (On the other hand, it's perfectly possible to put his strategy to work without having to read the market results every day or even every week). And third, his ideas about investing are shaped by a knowledge of the world outside the world of business and finance, how it has changed, is changing, and still will change.
Reading it gives me a sense that intelligent attention can make one's 401K (or what's left of it) less precarious, while allowing most of the growth potential that somehow had escaped me. It's a great little book that has had me thinking for days - and feeling much better about my future. I'd turn around the old chestnut of reviewers - if you read only one book on investing this year blah blah - and say if you had no intention of reading any more investing books this year (or for the rest of your life) - read this one anyway.
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