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63 of 80 people found the following review helpful
3.0 out of 5 stars Decent overview, but didn't really learn anything new, March 18, 2007
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This review is from: The Bogleheads' Guide to Investing (Hardcover)
I would say this is a good book for beginners. For someone with some understanding of investing and personal finance, it is likely that you will spend more time agreeing with the authors than actually learning anything new or insightful. It is a good overview of the investment ideas of John Bogle and his supporters, and has decent coverage of how to approach financial goals throughout one's lifetime. But after reading it, I felt like I did not gain any original insights, other than to ponder whether I should get my family an umbrella insurance policy. On the other hand, great books from Malkiel, Swensen, Swedroe, and W. Bernstein absolutely provided me with much material and original insights to ponder and consider.

So if this is not very helpful for readers with some investment knowledge, how is the book for novice? I would say it is merely decent. A novice reading this book would be pretty much following the advice of John Bogle, who is no question a GREAT man. But the authors seem to be constrained to agree with Bogle on everything, and do not allow themselves to further explore areas that probably deserve more time. One example would be Bogle's views on international stocks, where the authors of this book tread very lightly and conclude by agreeing with Bogle (almost seemingly hesitantly). When reading Bogle's own writings, his strong opinions serve his readers well. But when his ideas are rewritten into a broader personal investment guide for novices, I feel like the result is inferior to books by Frank Armstrong, William Bernstein, or Larry Swedroe, which seem to provide a broader perspective to help investors make decisions.

This is a pretty good book and has good advice on personal finance. But it is hard for me to get as excited as the other reviewers on this site. I think 3 stars is fair, as it is above average.
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Showing 1-2 of 2 posts in this discussion
Initial post: Jan 14, 2008 11:10:36 AM PST
Last edited by the author on Jan 23, 2008 3:08:46 PM PST
I agree with meltbanana about:

"When reading Bogle's own writings, his strong opinions serve his readers well. But when his ideas are rewritten into a broader personal investment guide for novices, I feel like the result is inferior to books by Frank Armstrong, William Bernstein, or Larry Swedroe, which seem to provide a broader perspective to help investors make decisions."

My addition:

This guidebook seems to be written especially for prospective DIYs Diehards, as a primer to posting on Morningstar's Vanguard discussion forum, and recently at the new Bogleheads Website.

The authors, none of whom is a financial advisor, expanded on rendering financial planning advice in the Guide. While Bogle in his 1999 book "Common Sense on Mutual Funds" was sympathetic to financial advisors by writing "Good advisers give you their personal attention, help you avoid some of the pitfall of investing, and provide worthwhile asset allocation and fund-selection service", the three authors of the Guide, took another tack by criticizing financial advisors.

The chapter "Do You Need an Advisor?" ends with "And, perhaps by the time you've finished reading this book (and a few others) and discovered that investing isn't rocket science, you may just decide that you can handle the task, and that you, too will become a DIY investor."

The above mentioned chapter "Do You Need an Advisor?" starts with the following motto by one of the authors "I helped put two children through Harvard-my broker's children". It continues with an example of a college friend of the other author , who later became a broker, and confided that they had a cute saying at the brokerage house where he worked: "When someone buys or sells an investment, the brokers makes money, and the brokerage house makes money, and two out of three ain't bad".

Such cheap shots against financial advisors are spread here and there in the Guide. It even reached the silly "advice" to Diehards who are looking for insurance products to first go see a "Certified Public Accountant (CPA) who does not sell investment products".

Other misleading financial planning "advice" in the guide are in the treatment of insurance products and their marketers. The authors whom never sold any insurance products to clients, see themselves as experts in this area. The chapter "Protect Your Assets by Being Well- Insured" starts with the motto: "Insurance is the business of protecting everything except the insurance agent". Following this tone the Guide treats insurance and annuities sellers as "vultures", as though there is hardly any needs for risk management in the financial planning process.

The problem with the "Guide" is that it pretends to be a reliable comprehensive financial planning "text book", which it is not. The false impression that the Guide could convert readers to successful DIY investors might be quite costly. Given this potential danger I give the Guide NO stars.

In reply to an earlier post on Mar 22, 2009 4:28:52 PM PDT
Patrick says:
While agree with you on the fundamental fact that Bogleheads Guide to Investing is geared towards "Do It Yourself" types of individuals; however, I disagree with you that the cheap shots ate financial advisors are unwarrented.

I onced was part of Primerica and had been Securities (6/63) license and Licensed to seel Life Insurance, and was basically taught buy term and invest the difference. The Bogleheads Guide, basically followed the same priniciples and much of the information it provides on the Financial Industry (especially mutual funds), can be varified by several professional financial websites, books, and magazines. Indexing has long been noted to beat 75% of the actively managed mutual funds over the coarse of ten years and the percentage goes up over longer periods of time. It's a fact that many brokers and financial advisors face a moral issue of selling mutual funds that are commissioned based (e.g. Loaded Mutual funds). This conflict of interest in as of in of itself has lead me to leave the financial industry, being convicted that investors are not going to get their fair shake (I left the industry before I sold one loaded mutual fund myself). I strongly believe that index (especially target retirement index funds) investing is best overall for the average joe who is not going to do his homework. I personally invest in both active and index based funds, but I will only invest in active funds after I do a lot of my own research.

I also have an investment advisor to help keep my risk down in another portfolio due to my wife's having a lower risk tolerance than I do myself. Luckily the advisor we have is an honest man, and has so far done a decent job; how I know this was during the economic down turn starting in 2008 our advisor even called me personally to assure me and to stay the course (which I would have done anyway), he has also the same attributes that you have quoted from the Common Sense on Mutual Funds.

I still do DIY investing in my own pretax retirement plan as to compare his results against mine (which we are currently neck to neck of 39% loss); however, do note that the loss under his portfolio scheme includes the 5.74% sales charge, after the sales charge it would be roughly 33.26% loss. It proves a point that investors can lose the same amount of money without having an investment advisor to do it for them via commissions. Luckily his company only takes the initial sales charge and each additional investment does not get hit by any additional commissions (a nice surprise I might add); when I was at Primerica clients would get hit with commissions by both initial and additional investments into the funds they were sold, talking about roughly 5.75% loss everytime your money went into each fund, ouch (and for that very reason, that is why I beleive some of the cheap shots are warrented towards financial advisors).
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