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The Future for Investors: Why the Tried and the True Triumphs Over the Bold and the New [Kindle Edition]

Jeremy J. Siegel
4.2 out of 5 stars  See all reviews (61 customer reviews)

Print List Price: $27.50
Kindle Price: $11.99
You Save: $15.51 (56%)
Sold by: Random House LLC

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Book Description

The new paradigm for investing and building wealth in the twenty-first century. The Future for Investors reveals new strategies that take advantage of the dramatic changes and opportunities that will appear in world markets.

Jeremy Siegel, one of the world’s top investing experts, has taken a long, hard, and in-depth look at the market and the stocks that investors should acquire to build long-term wealth. His surprising finding is that the new technologies, expanding industries, and fast-growing countries that stockholders relentlessly seek in the market often lead to poor returns. In fact, growth itself can be an investment trap, luring investors into overpriced stocks and overly competitive industries.

The Future for Investors shatters conventional wisdom and provides a framework for picking stocks that will be long-term winners. While technological innovation spurs economic growth, it has not been kind to investors. Instead, companies that have marketed tried-and-true products for decades in slow-growth or even declining industries have superior returns to firms that develop “the bold and the new.” Industry sectors many regard as dinosaurs—railroads and oil companies, for example—have actually beat the market.

Professor Siegel presents these strategies within the context of the coming shift in global economic power and the demographic age wave that will sweep the United States, Europe, and Japan. Contrary to the popular belief that these economic and demographic trends doom investors to poor returns, Professor Siegel explains the True New Economy and how to take advantage of the coming surge in invention, discovery, and economic growth.

The faster the world changes, the more important it is for investors to heed the lessons of the past and find the tried-and-true companies that can help you beat the market and prosper in the years ahead.


From the Hardcover edition.


Editorial Reviews

From Booklist

"The constant pursuit of growth--through buying hot stocks, seeking out the next big thing, or investing in the fastest growing countries--dooms investors to poor returns." So states Siegel, an academic who, with optimism and extensive research, suggests that the future is bright for equity investors in old, reliable companies in slow-growth or even shrinking industries. He presents a framework for understanding world markets and offers strategies for protecting and enhancing long-term capital. Stocks will outperform bonds and other inflation hedges, and he recommends supplementing indexed portfolios using three directives--buy stocks that have sustainable cash flows and return these cash flows to the shareholders with dividends; recognize the economic power shifts from the West toward China, India, and the rest of the developing world; and accumulate shares in firms with reasonable valuations relative to their expected growth while avoiding trendy investments. Warren Buffet, the preeminent investor, suggests that those interested in investments should study Siegel's new facts and ideas. Mary Whaley
Copyright © American Library Association. All rights reserved

Review

“Jeremy Siegel has done us a great service with his superb work. While no one can predict the future of stocks with certainty, Siegel’s analysis marks the verdict of history: the triumph of the shareholder over the shareflipper, the investor over the speculator, the builder over the gambler. Strong conclusions, good writing, and a refreshing message make this a compelling and important book to read.” —Jim Collins, author of Good to Great and co-author of Built to Last

“Jeremy Siegel’s lively new book is much more than a typical Siegelian guide to asset allocation. It is a masterful, provocative, fact-stuffed, commonsense, and creative guide to profitable stock-picking strategies. Even the most cynical and experienced investors will gain from reading Siegel’s latest contribution to their well-being.” —Peter L. Bernstein, author of Against the Gods: The Remarkable Story of Risk

“Jeremy Siegel is a wise man and an astute observer of the ever-changing investment universe. The Future for Investors is essential for the professional and serious amateur investor to navigate the new era.” —Barton M. Biggs, managing partner, Traxis Partners 

“The professor who taught America to love stocks in the 1990s is as optimistic as ever. But he’s added a new twist to his theory: Get dividends.” —Money magazine, December 2004  

“Siegel thinks about the future in a unique and original way, with insightful thoughts about the broad sweep of history as well as hard-headed investment analysis.” —Robert Shiller, author of Irrational Exuberance and The New Financial Order

“The ‘Wizard of Wharton’ weighs in on the markets ahead. . . . Deeply committed to understanding the macro-financial sector and its constant change has made him an outstanding teacher for [t...

Product Details

  • File Size: 9287 KB
  • Print Length: 336 pages
  • Publisher: Crown Business (March 8, 2005)
  • Sold by: Random House LLC
  • Language: English
  • ASIN: B000FCK1T8
  • Text-to-Speech: Not enabled
  • X-Ray:
  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #245,270 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
68 of 70 people found the following review helpful
3.0 out of 5 stars Good Book, Has Some Holes September 19, 2006
Format:Hardcover
The Future for Investors has some really great points - the main one being that the compounding power of reinvested dividends should be a significant consideration in stock selection. I agree with this approach, and Siegel makes some persuasive arguments that it provides higher returns and less volitility than other approaches.

However, I agree with some of the criticisms of the book as well:

1) Siegel does not address the tax impact on dividends. His research uses 1957 as a starting point. While our current dividend tax rate is 15% at the federal level, during most of the period from 1957 the rate was higher (sometimes the same as the income rate). During these times, the reinvested amount of the dividend would have only been about 60-70% of the total. Thus, returns would have been lower. (Some people have said that this would only make a marginal difference - maybe so, but it might have changed his argument in comparing Standard Oil to IBM as well as the small advantages he pointed out in some of his stock recomendations. A 1% per annum difference over a multi-decade period amounts to serious money).

2) Siegel cites Altria as the best performing stock during this period. I won't disagree with the conclusion, but I will point out that going for high dividends and reinvesting them works well only when the company survives. What if Beth Steel had been your choice rather than Altria? You would have received lots of dividends and reinvested them, but the ultimate outcome would have been a disaster. The point is that reinvesting dividends works especially well when the reinvestment happens during a difficult time for the stock AND (most importantly) the stock MUST recover from those difficult times.
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239 of 262 people found the following review helpful
4.0 out of 5 stars Useful, with a caveat March 12, 2005
Format:Hardcover
Siegel's basic advice to stock investors is to focus less on growth stocks and index mutual funds (eg., Vanguard 500) and more on looking for tried and true stocks that pay high dividends. He argues that such reinvested dividends are the true source of stock returns, or the "El Dorado." (His term). Overall, this argument is well-presented and persuasive.

However, I am perplexed on a key element. His case is largely based on historical evidence that purports to show that high dividend yield stocks, with dividends reinvested, have accumulated more total return than growth stocks or index mutual funds. However, his calculations do not account for the deleterious effect of taxes on reinvested dividend. (He says in an endnote that taxes are not significant for the portfolios he chose, but does not explain why; for most common stock portfolios, taxes are significant.) Dividends are taxed yearly and until recently at a higher rate than that of capital gains and that of retained earnings, which are not taxed at all. If taxes have been paid on dividends, only the untaxed part can truly be considered "reinvested"; the part that is taxed has to be made up by a new infusions of cash from the investor. The effect of ignoring this is that his historical comparisons are not terribly meaningful because he is not calculating the returns on true (after tax) contributions to dividend stocks vs. growth stocks. Naturally, if more is contributed to the dividend stocks, there is likely to be more at the end. (BTW, this is basically the same fallacy that sunk the allegedly huge returns of the otherwise delightful "Beardstown Ladies" of yore.) Given that the magnitude of the "advantage" he posits of dividend stocks vs.
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96 of 104 people found the following review helpful
5.0 out of 5 stars Insightful analysis without sensationalism March 12, 2005
Format:Hardcover
In his earlier book, Siegel had proven that stocks are the best investment vehicle for the long term. In a fitting "sequel" to his previous bestseller, Siegel answers the question "which stocks to buy for the long term". The book is divided into 5 parts - the first two parts focus on analysis of historic data using very unique perspective, mostly with respect to changing membership of SP500 index over the years. In the third part, he discusses the different measures to consider while analysing a company's performance from the shareholders' points of view. The fifth part is perhaps the most useful for readers seeking investment advice. He provides a sample portfolio based on the priciples he explains in the third and fourth parts of the book. In addition to percentage allocation for US and non-US markets, he provides allocation targets for some of the specific investment strategies he discusses in the book (these strategies are well discussed and their rationale is convincingly presented; most of them are centered around the dividend paid by the company). The author also provides a sector analysis of the market over the years and provides his "prediction" on which three sectors will likely perform the best over the long term. A real treasure for any long term investor! it should be pointed out that the analysis dont really address tax implications, but the conclusions derived from the analysis would still likely hold since the strategies focus on long term investing.

The book is thorough and comprehensive, but explained in an easy manner. Each chapter ends with a summary which provides a succinct representation of the chapter. A detailed list of references/citations used by the author and a set of appendices with more data analysis is also included, and is certainly a resource for any serious investor. Day traders and speculators may be disappointed with the book, but any long term investor will find this to be a cornerstone of any investment plan. A must have!
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Most Recent Customer Reviews
5.0 out of 5 stars Five Stars
I already own this book. I bought it for my daughter to learn how to properly invest.
Published 1 month ago by Timothy J Farness
5.0 out of 5 stars Good Source
Excellent information for many people.
Published 2 months ago by mies
5.0 out of 5 stars All investors should read this book
This should be required reading for anyone investing in general... especially in equities. It's a book that will benefit both professionals and non-professionals alike.
Published 6 months ago by Jed Freifeld
5.0 out of 5 stars Well researched sensible advice for investors.
It's important and insightful book for those investing for the long term. What this book does is that it supports arguments through thorough research over long periods of time.
Published 8 months ago by kinghitesh
5.0 out of 5 stars Great reference book.
Excellent scholarship and very well written for individual investors. I bought additional copies for my family to help them formulate their own portfolio game plans.
Published 9 months ago by Richard C. Ogden
5.0 out of 5 stars Good Book!
This is a great book from Dr. Siegel. It is helpful for baby booms planning their retirement. I recommend it.
Published 10 months ago by Stephen E. Jaffe
3.0 out of 5 stars Investment Book with Dated Research
The Future for Investors was written in 2005 and needs an update since the 2008 downturn. It has aged somewhat but it does offer timeless advice in an accessible manner. Read more
Published 14 months ago by MacheteJason
5.0 out of 5 stars Changed investing style
This book is written by a credible, highly resourceful Wharton professor of economics. His claims and thoughts on investing methods are backed by data, are well-referenced, and are... Read more
Published 14 months ago by Nathan
5.0 out of 5 stars Great book for dividend investors
If you are considering becoming a dividend investor, this is a great place to start. Professor Siegel does a good job of explaining and demonstrating the power of dividends. Read more
Published 14 months ago by John R. Waller
5.0 out of 5 stars The Future for Invesors is an important narrative during these...
The Future for Investors is a must read for equity investors, both beginner and seasoned. Jeremy Siegel integrates history and good data to make a very important point; dividends... Read more
Published 20 months ago by John K. Woodwell
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