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Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies, 4th Edition Hardcover – November 27, 2007
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From the Back Cover
For more than a decade, Stocks for the Long Run has been the authoritative guide to understanding market forces and building a successful portfolio. In this new fourth edition, Jeremy Siegel updates his argument for long-term stock market investment with: comparisons of ETFs, mutual funds, and index options and futures; evidence that the rapid growth of emerging markets will not only continue but may accelerate; insight into the benefits of fundamental indexation over market value indexation; an updated look at the surprising validity of Calendar Effects; and fresh analysis of the best-performing stocks since the formulation of the S&P 500 Index.
Praise for previous editions of STOCKS FOR THE LONG RUN
"One of the ten best investment books of all time."
--The Washington Post
“A simply great book.”
“One of the top ten business books of the year.”
“Should command a central place on the desk of any 'amateur' investor or beginning professional.”
“Siegel's case for stocks is unbridled and compelling.”
“A clearly written, neatly organized, highly persuasive exposition that lifts the veil of mystery from investing.”
--John C. Bogle, Founder and former Chairman, The Vanguard Group
About the Author
Jeremy J. Siegel is the Russell E. Palmer Professor of Finance at The Wharton School of the University of Pennsylvania, the academic director of the Securities Industry Institute, and a senior investment strategy advisor to WisdomTree Investments, which creates and markets exchange-traded funds.
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However, I am perplexed on a key element. His case is largely based on historical evidence that purports to show that high dividend yield stocks, with dividends reinvested, have accumulated more total return than growth stocks or index mutual funds. However, his calculations do not account for the deleterious effect of taxes on reinvested dividend. (He says in an endnote that taxes are not significant for the portfolios he chose, but does not explain why; for most common stock portfolios, taxes are significant.) Dividends are taxed yearly and until recently at a higher rate than that of capital gains and that of retained earnings, which are not taxed at all. If taxes have been paid on dividends, only the untaxed part can truly be considered "reinvested"; the part that is taxed has to be made up by a new infusions of cash from the investor. The effect of ignoring this is that his historical comparisons are not terribly meaningful because he is not calculating the returns on true (after tax) contributions to dividend stocks vs. growth stocks. Naturally, if more is contributed to the dividend stocks, there is likely to be more at the end. (BTW, this is basically the same fallacy that sunk the allegedly huge returns of the otherwise delightful "Beardstown Ladies" of yore.) Given that the magnitude of the "advantage" he posits of dividend stocks vs. growth stocks is not all that great, one cannot have confidence that he has truly made his case.
That said, his advice is very useful for investors in tax sheltered 401Ks. Also, the new lower tax rate on dividends also helps lessen, though not eliminate, the effects of yearly taxation of dividends.
In addition to emphasizing the importance of the contribution of stock dividends to equity portfolio performance, this book also grapples with a perplexing challenge to Siegel's original stocks for the long run mantra, the much vexed question of what will happen if and when the populous Baby Boom generation attempts to cash in its stock and bond retirement portfolios by selling them to the smaller demographic of Gen X and Gen Y. An entire school of catastrophe futurologists, most notably Harry Dent, but also more mainstream voices like Peter G. Peterson (The Grey Wave) have warned that this so-called Age Wave is about to wreak havoc with stock market investments. In this book, Siegel does not dismiss this issue, but deals with it in a logical and generally less alarmist point of view. At the risk of oversimplifying a complex analysis, Siegel's bottom line is that while it is true that there are not enough younger generation Americans to absorb the Boomers stock and bond assets at current prices, investors in emerging countries, like China and India, will more than make up for that and will end up buying the Baby Boomer's paper assets as the Boomers sell them off to fund their retirements. The upshot is that foreigners will end up owning a lot of our companies by the year 2050. A potential snag, says Siegel, is whether America will be willing to let this happen, or will pass laws or adopt polices to discourage the transfer of US assets to foreign countries. This remains to be seen, but he is optimistic. On the other hand, the implications for the typical Baby Boomer's most important asset, his or her house, is rather dire, because homes can't be sold as readily to foreigners, for obvious reasons. Siegel doesn't provide an answer for the housing market, which is outside the scope of a book on stock investing in any event. Overall, this remains one of the best written and most sensible investment books available today, now offering a more nuanced and even more helpful sets of advice than the previous editions. With new information and analysis, this is well worth owning, even if you have a previous edition.
it's comprehensive in that it includes discussion of indexes, markets, risk, historical returns, equity investment vehicles, etc.
Also includes newer topics such as Behavioral Psychology.
At 400 pages it's at the right level of detail for do-it-yourself investor who doesn't want to get bogged in analysis of efficient frontiers or CAPM.
Unfortunately it was published just before our current crisis so we will have to wait until the next edition to get the author's thoughts on conditions we are experiencing now.
However I must ask how many people have the stomach to be 100% in stocks and have the fortitude to ride the roller coaster of the dizzying market cycles.
I wish there were more written in this book on how to maintain your fortitude in market crashes without hiring an advisor who will likely panic just as much in a crash.
I highly recommend for those with great investment knowledge and those individual investors trying to learn more. I have worked in the inv. profession for over 20 years and heard Dr. Siegel many times. I highly recommend his book for those on all levels of experience except those who have not yet mastered the difference between a stock and a bond. It may be above your heads at this time.
Top international reviews
Still one advice to Siegel for his next edition: make the graphs a bit smaller...
So weit so gut.
Die gewonnen Erkenntnisse sind allerdings nichts neues, man findet sie auch in den gängigen Fachbüchern zum Thema (wenn sie aktuell sind). Dort sind sie aber zusammengefasst, auf den Punkt gebracht. Hängt also davon ab, ob man es glauben oder nachgewiesen haben will.
Persönlich würde ich für interessierte Privatanleger eher die Buy and Hold Bibel empfehlen, da dort die gleichen Rückschlüsse getroffen werden, aber mehr auf deutsche Verhältnisse eingegangen wird.
Für Studenten einer entsprechenden Fachrichtung wiederum ist dieses Buch wahrscheinlich besser geeignet...