Customer Reviews

Winning with Index Mutual Funds: How to Beat Wall Street at Its Own Game

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

 

 

A great introduction to index funds. Two other texts that complement this book are John Bogle's "Bogle on Mutual Funds" and the seminal "A Random Walk Down Wall Street" by Burton Malkiel. The case against actively managed mutual (or pension) funds is persuasively presented by any of these three but the Tweddell/Pierce treatment is more practical. The only criticism is that its list of index funds is already out of date. Fidelity, Merrill Lynch, etc. have recently joined the fray and some funds have closed

Great book--readable, troubling, eye-opening. I wish that I had read something like this ten years ago

As an excellent review of index fund investing, I give this book an A.

Tweddell and Pierce's book was one of the first books about index fund investing. They published this book in 1997, prior to the index fund 1999 peak in popularity.

They do an excellent job of explaining index mutual funds and why they are advantageous for most investors.

They point out the paradox that a person is better off seeking the help of an expert for most things including medical doctors, car mechanics, and plumbers. Financial advice is one area where seeking out experts is not necessarily the right way to increase your net worth.

The key point of their book is that most active fund managers can not beat the indexes due to higher costs. Another key point is that by adopting a buy-and-hold index fund strategy, investors will reap the returns of the stock market because they will quit their futile efforts at market timing. They point out that indexing is even more important in bonds because expenses of actively managed bond funds eat up a lower starting return for bonds than stocks.

They point out the importance of asset allocation and demonstrate how an indexing strategy can be used to implement your desired asset allocation strategy.

I would suggest companion books to supplement this book including The Richest Man in Babylon, Bogle on Mutual Funds, The Millionaire Next Door, The 4 Pillars of Investing, A Random Walk Down Wall Street, Wealth of Experience: Real Investors on what Works and What Doesn't, The Coffeehouse Investor, and the Armchair Millionaire.

I liked this book on its readability. I scanned a few other books on indexing; they were too dry for me.