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The Investment Answer Hardcover – January 25, 2011
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"An excellent primer for the investor who is not a finance specialist." --Eugene F. Fama, Robert R. McCormick Distinguished Service Professor of Finance, Chicago Booth School of Business, widely recognized as the "father of modern finance," Nobel Laureate in Economics, 2013
"Goldie and Murray have distilled the essence of the matter, and
explain in clear English, the advantages of using a fee-only financial advisor, how to select such, and how to work with one in the short and long run. This is sound advice, which you will rarely if ever get from a daily financial newscast." --Harry M. Markowitz, PH.D., Nobel Laureate in Economics, 1990, Father of Modern Portfolio Theory
"Gordon Murray and Dan Goldie have written a book that every
American should read. Its clarity de-mystifies the investment process and its insights can make anyone who reads it a better investor." --Bill Bradley, former United States Senator
"I'm glad to see Gordon and Dan collect these insights into a handy, easy-to-use primer so Gordon can stop explaining these principles at Sunday brunch and family birthdays. Full disclosure: Gordon's my brother-in-law. That said, I found this slim volume incredibly helpful in explaining how to think about investing. It's reassuring to know there are some simple principles anyone can keep in mind to make decent decisions and banish the vague anxiety most of us have about where we've put our money." --Ira Glass, Edward R. Murrow Award winner, Host of NPR's This American Life
"Murray and Goldie use simple yet compelling logic to explain the fundamental principles of investing. Their clear advice will improve your investment experience." --Kenneth R. French, Heidt Professor of Finance, Dartmouth College, Tuck School of Business
"Gordon Murray and Dan Goldie share secrets that Wall Street would rather you not know. You can implement a few simple strategies at a very low cost that will outperform most of the stock picking and complicated advice hawked by high-priced brokers. Read this book and prosper." --Joseph A. Grundfest, former SEC Commissioner, cofounder of Financial Engines, and Professor of Law and Business at Stanford Law School
"Wow! Goldie and Murray have just hit a home run. If I could give only one book on investing to my friends and family, this one would be it." --Bob Waterman, co-author, In Search of Excellence, former director of McKinsey & Company
"Demystifies the investment process . . . a book every American should read." —The Honorable Bill Bradley, former United States senator
"Wow! If I could give only one book on investing to my friends, this would be it." —Bob Waterman, bestselling coauthor of In Search of Excellence
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Top customer reviews
I have been a full time faculty member teaching at the college level for the past 35 years and must say that the authors have managed to capture the essence of personal investing in about as few pages as I have ever seen and with a clarity that is very rare in books on this topic. I intend to make it required reading for both my undergraduate and graduate personal finance classes.
I might also add that any negative reviews posted to this site are likely to come from Wall Street brokers who make their living by exploiting the general public's ignorance on investing. These brokers don't like books that clarify and illuminate rather than mystify and obfuscate basic principles. As a lifelong educator, I applaud Goldie's and Murray's noble effort to help readers educate themselves so as not to be fooled by the same Wall Streeters who disgraced themselves in 2008 and nearly destroyed our economy with their greediness. Anyone who feels they don't know enough about investing should read this book. It is a gem.
This is a clear, concise explanation of investing for the non-professional. I've already given away one copy and plan to give another. I've read LOTS of bits and pieces, but this puts it all together. Two areas highlighted that aren't well understood: the graph on risk vs asset allocation, and how volatility affects return.
Very slight caveat: I was given the book by an investment adviser, along with some additional material on the authors that somewhat highlighted Dimensional funds (at least one of the authors worked for Dimensional). Dimension investment is a newer indexing strategy that seems to me to be still unproven (the latest analysis I read is that at this point they are not doing better than regular indexes).
If you're incapable of tearing yourself away from CNBC for a single day or of checking on your portfolios by the hour, this book could lead to a fuller, more rounded and productive life. It covers what is largely familiar territory for those who are aware of the enormous odds against simply matching the market averages and who have learned about "efficient markets" and the advantages of "passively managed," or "index funds," which are always the best bet at staying even with the market while not giving back any earnings to the high-expense funds that trade heavily. It endorses "diversification" but warns against diversifying over narrowly--as some investors are prone to do when their singular success in one technology stock leads to purchase of many more stocks in the same sector.
Perhaps the most surprising statement made by the authors--especially after the public has been constantly teased by prospects of higher and higher gold prices and the virtual "necessity" of having at least 10% of one's life-savings invested in the metal--is the authors' contention that gold, silver, platinum, titanium, hard commodities and agriculture--don't belong in the average person's portfolio, period. Commodities take you out of the earnings stream and and limit positive growth. Above all, capitalism by its very definition means a "positive return" for the economies that practice it. As a so-called "hedge," commodities don't reduce risk, which is what investing should be about: instead, they increase risk, whether in terms of a short-term loss or a short-term gain. Investing in commodities is nothing more than a bet. The authors bluntly say that, in their opinion, investors don't need alternative investments such as commodities in order to have a successful investment experience.
In short, investing is about going on a trip to a place you firmly believe exists and to which you would like to travel. It's not, contrary to the practice of many investors, a game of winners and losers, so why "hedge" against either possibility? Yet some people will buy expensive insurance contracts in the event the trip is cancelled or invest in over-priced umbrellas in the event of rain. If such use of time and money is fun, and you don't mind the extra cost, do it. On the other hand, the authors are saying that if you want to experience worry-free investment success, save yourself all that wasted time and money and make the most out of your short life. At the very least, you'll save not just your money but some precious time and talent to give to those in need. Paradoxically, the person who stands to profit most, is the giver. That's when capitalism begins to run with, instead of against, the tenets of the world's major religions, including Christianity.