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All About Index Funds: The Easy Way to Get Started (All About Series) Paperback – December 22, 2006
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From the Back Cover
All The Tools and Techniques You Need to Invest Successfully in High-Yield, Low-Risk Index Funds
The updated Second Edition of Richard Ferri's bestselling "All About Index Funds" offers individual investors an easy-to-use guide for capitalizing on one of today's hottest investing areas_index funds. This wealth-building resource provides essential information on index funds; expert advice on how to start investing; and winning strategies for high returns with low risk.
The Second Edition of "All About Index Funds" features: Updated tables, charts, and data on performance, fees, and new funds Step-by-step guidance on active indexing and discussion of its expanding role Coverage of all new U.S. equity indexes that have changed the dynamics of the index fund marketplace and a new chapter on commodities and commodity index funds Vanguard's revision of the indexes it uses for benchmarking Discussion of the increasing popularity of ETFs for effective asset allocation
About the Author
Richard A. Ferri, CFA, is the Founder and CEO of Portfolio Solutions, LLC, a fee-only investment firm serving high-net-worth individuals, families, non-profit organizations, and corporate pension plans. Mr. Ferri is the author of "All About Asset Allocation" and "Protecting Your Wealth in Good Times and Bad," both available from McGraw-Hill.
About the Author
Richard A. Ferri,C.F.A. is the president and senior portfolio manager of Portfolio Solutions, an investment adviser and portfolio management firm.
Top Customer Reviews
This well organized easy to read 275-page book contains 16 chapters on everything you wanted to know about index funds, including:
- Different types of funds and their composition
All about exchange traded funds (ETFs), their features and advantages
Sector index funds, REIT index funds, Merrill Lynch HOLDRS
Global and international index funds
Bond index funds
Enhanced, leveraged and inverse index funds
Tax-advantaged index funds
- Indexes as benchmarks
- Advantages of index funds over standard mutual funds
- Comparison of index funds to actively managed funds for 5,10 and 20-year periods
Then Ferri details how to create your own customized index fund portfolio using an Internet server. He covers what you should realistically expect to earn from your portfolio based upon historical returns since 1950. Next, he reviews the critical subject of asset allocation and the necessity of having a diversified index portfolio that should be rebalanced each year.
Ferri provided guidance on defining your financial goals. He covers determining your future financial needs, developing your current earnings and earnings power, assigning asset allocation parameters, and then stress testing your bond and stock asset allocation. He provides a 5-step method to help determine your asset allocation (setting goals; making an inflation adjustment; determining a savings plan and required return; deciding on asset allocation; and assessing risk).Read more ›
I enjoyed Ferri's method of determining his client's risk tolerance. He puts his clients through one of our most recent Bear Markets, 1973-1974, and sees if they can stand the losses to their portfolio with a starting asset allocation. If they can't stand the losses, he adjusts the asset allocation to a lower risk allocation until they can stomach the losses.
I also enjoyed his explanation of Modern Portfolio Theory. His hypothetical example shows that a portfolio made up of stocks and bonds actually has a slightly higher return and slightly lower risk than you would expect using simple math.
Ferris is also willing to go out on a limb and predict returns for various asset classes and inflation for the next 30 years. He seems to agree with Buffett that stocks will deliver a nominal return of 8% versus the 70 year average of 11%. Of course Buffett predicted stock returns in the 1980's would be in single digits and the S&P returned a compounded nominal of 18%.
Ferri does a great job of explaining why index funds outperform actively managed funds over long periods of time.
All in all, it is a very informative book.
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.
Most Recent Customer Reviews
Excellent book but needs another updating as more diverse types of index funds have become available since its last update.Published 3 months ago by Cultured Reader
Everybody interests in investing should,read this book. An alternative would be anything by Jack Bogle. Read morePublished 8 months ago by Rdfischer
A bit repetitive but gives great examples and is a good reference for investing.Published 12 months ago by Jacob Castro
If your using a agent , you might check this out to reduce your fee's. Even tho it was published in 2006 it is still valuable.Published on July 20, 2014 by PF
this was an ok book got some helpful knowledge. so for learning some stuff about index funds this book might help you.Published on January 13, 2014 by lance ramrod
When I check out a book from the library more than about 4 times, I eventually decide I have to buy it. This is one of those titles. Read morePublished on September 22, 2013 by Library book rat