- Audible Audio Edition
- Listening Length: 6 hours and 42 minutes
- Program Type: Audiobook
- Version: Unabridged
- Publisher: Gildan Media, LLC
- Audible.com Release Date: April 1, 2010
- Whispersync for Voice: Ready
- Language: English
- ASIN: B003F7R9EK
- Amazon Best Sellers Rank:
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How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn Audiobook – Unabridged
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Top customer reviews
After continuing my education a bit with other texts, I continue to be thankful for Roth, who explained everything so simply and clearly that I was able to grasp the basic concepts of investing, especially in regards to mutual funds, from the first page. His logic and reasoning made sense, and allowed me to start the conversation about financial planning with my family.
That being said, I don't recommend ENDING your education with the second grader book. In keeping everything simple, there are a lot of things that Roth wasn't able to add to the book - it wouldn't have been appropriate for this project! - so there's lots more to see and learn about.
To sum up - great start, clearly written, good basic rules and foundation for investing.
Maybe the human animal with its psychological quirks is unable to follow this advice. Perhaps we are hard-wired to needlessly complicate things. Not so, says author Allan Roth. There are people who invest this simple way and do quite well thank you. For an example, he introduces us to his son Kevin, a second grader at the time this book was written. Young Kevin began with a modest portfolio financed with a gift from his grandparents. It has done well over time, outperforming most professionals. How does Kevin do it?
Well, for starters. Kevin has certain advantages that adults lack. He goes to school, plays with his friends, and watches SpongeBob on TV. He doesn't fixate on his individual investments nor does he follow the market. He spends his time enjoying his childhood and wondering what he will be when he grows up. As a result, he doesn't churn his portfolio nor does he develop anxiety when the market drops.
Of course, Kevin is fortunate to receive sage advice from his Dad, a highly regarded financial adviser. But the reason he beats the Street is because he doesn't beat himself. Kevin ignores the daily dance of stock prices and lets his investments compound. In short, he behaves the way investment notables say we all should behave. We adults can learn a great deal following Kevin's example. And that is the point of the book.
Now some may complain that this is all too simplistic. A young boy doesn't have to earn an income to feed his family nor save for his children's education or his own retirement. And given his long investment horizon, he can afford to be nonchalant about the current value of his portfolio. But that misses the point. Wealth for both children and adults must be given time to grow; it usually does not come in a burst of good fortune. We often detract from wealth accumulation when we chase performance, sell in a panic, or bet the ranch on a few targeted investments. Building and maintaining a sound portfolio is not difficult and Kevin's Dad explains it clearly with a touch of humor. It may be humbling to us adults, but following the example of a second grader may just bring us closer to achieving our financial goals.
60% Total U.S. stock market index
30% international stock market index
10% Bond index
I also like the advanced 2nd grader portfolio:
54% Total US Stock market index
27% Total international stock index
10% Total Bond index
6% Total REIT index
3% Precious metals fund