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The Bond Book, Third Edition: Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds, and More Hardcover – November 17, 2010
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About the Author
- Publisher : McGraw-Hill Education; 3rd edition (November 17, 2010)
- Language : English
- Hardcover : 448 pages
- ISBN-10 : 007166470X
- ISBN-13 : 978-0071664707
- Item Weight : 1.7 pounds
- Dimensions : 6.4 x 1.31 x 9.4 inches
- Best Sellers Rank: #161,979 in Books (See Top 100 in Books)
- Customer Reviews:
Top reviews from the United States
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What's more, there's horrendous errors in the text, so I can't help but feel that the author is just restating what others have said without actually being able to ensure that the facts stated are indeed correct.
For example, at Kindle location 668, the author states that a 4% bond needs to be repriced to $300 in a 10% market. Now, I'm no bond expert, but I'd say that's got to be $400. Again, the author doesn't reveal how this was computed, so I have no idea who's correct.
At Kindle location 706, it is stated that 30.9% of a $1,000 bond is $31. Umm, don't you mean $310? On location 849, it says "only have only one rating". At location 2680, it says "rating scales, as noted in Chapter 3, rating scales in use". At location 3722: "But remember that that whatever". At location 5076: "interest rate risk A bond". Hello, editor, still awake at this hour?
On top of that, the material is apparently dated, the text refers to the year 2009 regarding current events (last updates seem to have been made in 2010) and warns that "downloading a prospectus requires fast Internet delivery. Don't try it with dial-up". Seriously, people still had dial-up in 2010? The web sites referenced in the text are unsurprisingly no longer up-to-date either, investinginbonds.com has 404 errors on some links and apparently no bond data anymore. The site says "Please be advised that, as of October 1, 2012, investinginbonds.com will cease to provide certain bond pricing information currently available on this site.", apparently two years after the last update of this book.
Looks like an update of this book is long overdue and someone needs to sit down and fix all the typos. The content isn't that bad, there's good explanations of various bond-related financial instruments and what to look out for when investing in them. It also provides some interesting insights into the events the lead to the 2008 bond crisis, but it would be prudent to get an update of what happened to the bond market in the 6 years after, leading up to today, which is early 2014.
The conclusive advice of the book is that younger people should invest 60% of their portfolio in diversified stock index funds and 40% in Treasury bonds of 2 to 5 years maturity. Older people should reverse the ratios. Retirees should keep most of their portfolio in Treasury bonds.
I have given the book a mediocre rating for a number of reasons: Significant parts of the book deal with US tax issues and US municipal bonds which are primarily of interest to US investors (which I am not). The concept of bond duration is poorly explained yet important in assessing future bond volatility. Statements are often made without documentation in the form of data-tables and plots. The book is very repetitive even within the same page. I think the book could be half as long yet contain the same material. The Kindle tables are too small which is a typical Kindle problem.
PS: This review is of the third edition.
I just finished reading the Kindle version of the current edition which served as a refresher of everything I've learned about fixed-income investing over the years.
While the book probably isn't for the "professional", it will serve as a valuable tool for the beginning investor or anyone who wants to learn more about fixed-income investing.
This is not some "rah, rah, rah, everything is fine" book written by someone with a vested interest in getting investors to line up to buy the latest product. Instead, it provides a very factual and candid explanation of just about every fixed income product an investor would want to buy....and many that they should stay far away from.
This revised edition was written just after the 2008 "financial crisis" and gives quite a bit of background information as to its causes. It should serve as a warning that what many always thought of as safe investments (like money market funds and funds of U.S. Treasuries/agencies) have their own set of risks and aren't a guaranteed investment by any means.
Anyone interested in adding fixed income investments to their portfolios (and that should include every investor) should consider this "required reading".
Top reviews from other countries
Kein schlechtes Buch, allerdings ist das "Bond Book" von Anette Thau umfangreicher und leichter verständlich.
But for the average investor who is just looking at self educating himself without too much fuss I can't recommend this book.. I have bought and read a few other books based on investments such as "the millionaire teacher, The RESP book by Mike Holman, Your life or your money" and they were all interesting to read. This is the first book in which I have not finished because I couldn't take it anymore. 420 pages of bond talk is just too much for me, after 100 pages (and a few skipped pages) I decided to close the book and not look back at it.
If you are seriously interested in BONDS go ahead (this book received excellent overall reviews on amazon.com).
For the first time I am returning a book on amazon :(