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The Elements of Investing (Your Coach in a Box) Audio CD – Unabridged, December 17, 2009
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About the Author
Burton G. Malkiel is the Chemical Bank Chairman's Emeritus Professor of Economics at Princeton University and the author of the bestselling A Random Walk Down Wall Street.
- Item Weight : 4.8 ounces
- ISBN-13 : 978-1596594586
- ISBN-10 : 1596594586
- Publisher : Gildan Media; Unabridged edition (December 17, 2009)
- Dimensions : 6.4 x 1.1 x 5.3 inches
- Language: : English
- Best Sellers Rank: #3,423,146 in Books (See Top 100 in Books)
- Customer Reviews:
Top reviews from the United States
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I thought so much of this book that I bought 5 additional copies to give to members of my family and have recommended it to many friends of mine.
After I gave this book to my wife to read, and she fought me on it for a short time, she was saying things like, "did you know this or that". It inspired her to make an investment choice without my assistance and she has felt more sure of what she is doing with our mutual funds since that time.
Please go to the library and read this book and then you too will buy a copy.
That said, this book has some clever points to it. For example, in relating the idea of dollar cost averaging, the authors present an example of how an investor using dollar cost averaging can make money even in a down market. (The trick: by investing at the low points, the gains for that portion of investment may outstrip the losses from the portions bought at higher prices.) That's not the sort of thing that always occurs even to savvy investors.
And it also has some very practical information: particularly, it lists several index funds of various sorts that the authors think are reasonable choices for the novice investor. This is perhaps the best part of the book, for while much of the rest of the information are things that might be guessed, picking an actual index fund (versus knowing that you should pick one) is not something that can be guessed. On this particular point, the book's providing some expert opinions is quite useful, and not something you can find so easily elsewhere (or at least with so much authority -- you can find suggestions all over the personal finance universe on the Internet, but trusting any of them is a quite different matter).
But overall, this is a very simple book, without frills, for the person just beginning to care about his personal finances. Particularly given the recent Pollyanna-ishness of investors concerning whether the whole idea of buy-and-hold must be thrown out, this book presents timely and useful advice. I do wish it had a little more meat to it. But what meat there is is simply and powerfully presented.
If you are also someone who struggles with spending rather than saving, this is a great read as well. There is a lot of wisdom that is passed along in a very simple format that will convince you to change your habits. You can learn a lot in a very short amount of time!
Top reviews from other countries
ジョン・ボーグルの『The Little Book of Common Sense Investing(邦題：お金の常識)』の方が、どっちかというと、国籍に関係なく楽しめるかも。
Elements of Investing is not a book promising to solve your financial problems; giving you a 2 week financial detox or the mircale of stock market investments returns that will allow you to quit your job at 30. What it does do is condense the elements of good financial management into a small booklet.
Of course we get the usual speech about motivations for saving and spending, how we should get a pension (albeit the book talks about the American system!) and the importance of a good budget. It's covering old ground but like getting a dental check, necessary for good health. I find the real beauty of this book is the small equations is gives to calculate what your return from savings and investments are, the calculations can also be used to establish what your returns need to be per year to achieve a target. It is simple well written stuff and I love it for it. It is one of the "elements" I regularly use when planning long term saving.
Some criticise the book by saying it is too short, but if something is taken down to the basic elements - it is going to be small because it is simple. Elements of Investing real strength comes from reminding us that small is better and more achievable - dreams of making it big buying some shares rarely goes anywhere. The only downside of the book is it's American slant, particularly on pensions.
I may not be a millionaire - but I realised that I was gonna get a lot fitter by walking rather than having a gym membership I never use. I started small by cancelling that membership saving myself £220 per year - it is now in my Cash ISA.
That the Elements of Saving way.
There's nothing wrong with writing a book about saving, unless you call it a book about investing. Investing presupposes you intend to take risk in order to make a profit, saving means you try to exclude risk and therefore settle for a lesser return. Malkiel's proposal is that all should save by investing in low cost broad-based market index funds (or equivalent ETFs) and start doing so early on to benefit from compounding interest. He also advises practicing dollar cost averaging by regularly saving fixed amounts over long periods of time. Malkiel does not believe we can outguess any other investor, let alone the market as a whole, in how a stock or even a market is going to perform. There's arguably plenty of academic research to back up the underperformance of fund managers, and Malkiel's advice is therefore not entirely unreasonable.
If you're an investment/finance ignoramus (aren't we all to some extent? OK, I'll hold my hand up to that one), this advice is even very relevant. But, it is less so if you're a more seasoned market observer/participant. Malkiel and Ellis make sweeping judgments pertaining to e.g. charting/technical analysis, but then proceed to lend some credence to behavioural finance. I'd have thought charting is the graphical interpretation of behavioural finance precepts. Only value investors, spearheaded by Buffett, find some grace in Malkiel's eyes and it is noticeable that he, humbly, puts himself and Ellis in that league. Another sweeping piece of advice contains the avoidance of credit cards altogether because they cost too much and make you dependent on your lender's repayment terms. That's true, unless you always repay your balance in full in which case a free card means one month's free credit every 12 months of the year. That should be worth something, not? Finally, there's enough research by McKinlay and other reputed authors to show financial markets are not fully efficient. Some humility would, thus, behove Messrs. Malkiel and Ellis.
All in all, this is an interesting read for your average US citizen having lost his faith in the markets, funds and tipsters alike and seeking a new haven for his hard earned cash. Malkiel points the way to a form of low risk saving. His cost benchmark is that no fund should be charging more than, say, 0.25% in annual management fees which excludes just about every index fund in the UK and Continental Europe.
Why Wiley decided to publish this book in the otherwise excellent series of the "Little Book Big Profits" investment titles is a mystery to me, but the name Malkiel was probably the deciding factor. James Montier's The Little Book of Behavioral Investing: How Not to be Your Own Worst Enemy (Little Book, Big Profits) is far more deserving with respect to the subject matter tentatively broached by Malkiel.