Book Review: The Motley Fool Investment Guide

The Motley Fool Investment Guide

About the Book:

A completely revised and updated edition of an investing classic to help readers make sense of investing today, full of “solid information and advice for individual investors” (The Washington Post).

Today, anyone can be an informed investor, and once you learn to tune out the hype and focus on meaningful factors, you can beat the Street. The Motley Fool Investment Guide, completely revised and updated with clear and witty explanations, deciphers all the current information—from evaluating individual stocks to creating a diverse investment portfolio.

David and Tom Gardner have investing ideas for you, no matter how much time or money you have. This new edition of The Motley Fool Investment Guide is designed for today’s investor, sophisticate and novice alike, with the latest information on:

—Finding high-growth stocks that will beat the market over the long term

—Identifying volatile young companies that traditional valuation measures may miss

—Using online sources to locate untapped wellsprings of vital information

The Motley Fool rose to fame in the 1990s, based on its early recommendations of stocks such as Amazon.com, PayPal, eBay, and Starbucks. Now this revised edition is tailored to help investors tackle today’s market. “If you’ve been looking for a basic book on investing in the stock market, this is it...The Gardners help empower the amateur investor with tools and strategies to beat the pros” (Chicago Tribune).

My Comments:

Conventional wisdom right now is that the best investment strategy for the average person is to invest in a diversified portfolio of  low cost index mutual funds or ETFs.  Studies show that few professional money managers are able to consistently beat the averages so just buying those averages puts you ahead of them.  

Rather than espousing conventional wisdom, The Motley Fool Investment Guide says that you can be better than average by investing in individual stocks as opposed to mutual funds/ETFs.  Their basic thesis is that fund managers are playing with too much money so that when they buy into a company it affects the price of the stock; and the same when they sell.  It is the opinion of the authors that individual investors, even if they do not possess the expertise that some of the professionals do, are able to achieve better than average results if they gather the proper information, analyze it and purchase stocks that are likely to produce better than average gains.

The book is easy to read and it describes where to get information on public companies, how to interpret it and what qualities to seek.  

While The Motley Fool Investment Guide gives a lot of good information, it is also a not-so-subtle sales pitch for the premium services offered via Motley Fool's website.  Those services start at $99 per year.  Still unlike some other books that seeks subscribers for websites, The Motley Fool Investment Guide tells you how to do it yourself--if you have the time, knowledge and resources.  It makes outsourcing the job sound very attractive. 

Still if you want to learn how to pick stocks, The Motley Fool Investment Guide is a good start. 

I'd like to that the publisher for making a review copy available via NetGalley. Grade:  B+

Quick Book Review: The Daily Telegraph Guide to Investing

The Daily Telegraph Guide to Investing

About the Book:

The Daily Telegraph Guide to Investing is your complete guide to the reliable opportunities and exciting niches that could help you boost your bank balance and make the most of your cash pile. The world of stocks, shares and investments can seem intimidating but, with the right information at your disposal, you will be able to work out how best to protect and boost your savings.

Whether you're a total beginner or a more experienced investor keen to learn about some new options, this easy-to-understand guide covers many of the various asset classes and alternative investments that are currently available to you. Each investing opportunity is assessed for levels of risk and potential of returns, from the safer options (including bonds, equities, ETFs, gold and property) to the riskier (including buy-to-let, FOREX, cryptocurrencies, futures and options).

The Daily Telegraph Guide to Investing gives you the straight-forward advice you need to make sensible decisions about your hard-earned wealth. From the glamorous (including fine wines, whisky, classic cars) to the quirky (including lego, stamps, memorabilia), this guide will give you a firm understanding of investment principles and what to look out for. Technical terms and phrases are all made clear and full guidance is provided on the potential pitfalls, dangers and scams that can face investors.

My Comments:

UK readers will probably find this book more useful than US readers as it covers retirement accounts available there, rather than IRAs, Roths and 401ks.  Still there is a lot of general investing information and the book covers some investments like FOREX that you see on blogs but rarely in investing books.  

Morality and Investing

Good Returns

About the Book:

Offering time-tested wisdom on the complexities of the investment process, this guide provides advice on how to invest in a morally responsible way. It provides information on how to screen and exclude companies according to a clear set of faith-based criteria: those who support or service the abortion industry, producers and distributors of pornography, and companies involved in embryonic stem cell research. Based on this set of guidelines, as well as the success of the Ave Maria Mutual Funds, the guide demonstrates that high returns are achievable without supporting companies that do not support similar values. Also included is insightful commentary on the current political policies affecting the country’s financial state.

My Comments:

Good Returns: Making Money by Morally Responsible Investing is written by the founder of the Ave Maria family of mutual funds.  The Ave Maria funds practice what they call morally responsible investing--they do not invest in companies that promote abortion or donate to its supporters, sell or promote pornography or which have policies supportive of homosexual or other non-marital sexual unions.  He contrasts "morally responsible investing" with "socially responsible investing" which generally supports left-leaning causes. 

While this is a book about investing and the economy; not about religion, the author, George Schwartz, does quote papal writings on the economy and a little scripture.  He sees free-market capitalism as a moral good and socialism as a moral evil.  The book is definitely pro-Regan, anti-Obama. 

Good Returns: Making Money by Morally Responsible Investing has its good points, and its weaknesses.  The first chapter, on money and morality is excellent.  The next two chapters were about Schwartz himself, and frankly, I wasn't that interested.  He then spends a couple of chapters talking about his investment principals, and about how investors think.  Those chapters were good.  Chapters 6 and 7 are highly political; my husband will love them.  They do serve the purpose of reminding the investor how politics affects the economy, for good and for bad--and how even good intentions, like  providing home ownership for those kept out by traditional lending practices, can have bad effects--like the housing bubble and its subsequent pop.  Chapters 8-11 are, in many ways, commercials for the Ave Maria funds. If you know nothing about investing or financial planning, there is good information there--and even those who read investment books may learn something about investing that they can use, even if they never buy Ave Maria mutual funds.

While most of us want to follow our values, most of us also invest with the idea of making money.  One question that came to my mind after reading this book was "How well do Ave Maria funds do?".  Ave Maria has a Rising Dividend fund which outpeformed the S&P 500.  Morningstar give it four stars and the expense ratio is 0.92%.  Their Growth Fund has also outperformed the S&P 500.  However their Values Fund and World Equity Fund trail their indexes.  Still, I don't think any of them are really bad investments and I do like the idea of investing in companies that share my moral values.  

Book Review: Rich Dad Poor Dad

 

Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

About the Book:

Rich Dad Poor Dad, the #1 Personal Finance book of all time, tells the story of Robert Kiyosaki and his two dads—his real father and the father of his best friend, his rich dad—and the ways in which both men shaped his thoughts about money and investing. The book explodes the myth that you need to earn a high income to be rich and explains the difference between working for money and having your money work for you.

My Comments:

If you ask most people what the difference is between the rich and the not-rich, you'll hear about education and getting a good job with good benefits. In Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!, Robert Kiyosaki suggests that it is more than that.  The rich have mastered the arts of deferred gratification and risk-taking.  While Kiyosaki's real father had a graduate degree and worked in a professional job, and had a decent (though not luxurious) standard of living while working, he had few assets, few things that would produce income for him.  Kiyosaki's other "Dad" lived in a smaller house, and did not have a good education. However, he had assets and he had people working for him.

Reading this book makes you think that anyone could become rich if only...and maybe they could.  Maybe my attitute is holding me back (though I have more assets than many do,so compare to them I am rich..) but as the book also says, it is easier to be broke at 30 than at 50, and since I'm closer to 50 than 30...

The book is an easy read and does give some ideas that most people could try, so, if you want to get rich, and are willing to put in the the work, good luck!

I'd like to thank the publisher for making a review copy available via NetGalley.  Grade:  B

Book Review: The 3% Signal

The 3% Signal: The Investing Technique That Will Change Your Life

About the Book:

Take the stress out of investing with this revolutionary new strategy from the author of The Neatest Little Guide to Stock Market Investing, now in its fifth edition

In today's troubling economic times, the quality of our retirement depends upon our own portfolio management. But for most of us, investing can be stressful and confusing, especially when supposedly expert predictions fail. Enter The 3% Signal. Simple and effective, Kelly's plan can be applied to any type of account, including 401(k)s -- and requires only fifteen minutes of strategizing per quarter. No stress. No noise. No confusion.

By targeting three percent growth and adjusting holdings to meet that goal, even novice investors can level the financial playing field and ensure a secure retirement free from the stress of noisy advice that doesn't work. The plan's simple technique cuts through the folly of human emotion by reacting intelligently to price changes and automatically buying low and selling high. Relayed in the same easy-to-understand language that has made The Neatest Little Guide to Stock Market Investing such a staple in the investing community, The 3% Signal is sure to become your most trusted guide to investing success. 

My Comments:

If you ask any reasonable person who invests in the stock market about goals, the general one given is to "buy low, sell high".  Yet, many people end up doing the exact opposite.  Why? Is there any way to change that?  Jason Kelly opines that trying to predict the market is a fool's game.  There are lots of pundits giving out lots of information (or at least making lots of noise), but the reality is no one knows when the stock market will fall next, or how far, we only know that it will fall one day, and that eventually, it will grow beyond where it is now.  In other words, the general trajectory of the market is up, but there are plenty of downs along the way.  All too often people follow the crowd--everyone gets afraid of falling stock prices, so "everyone" sells, and stock prices continue to fall, so the sellers lock in their losses.  Then the real winners step in; those who buy at low prices.  How can we be in that number?  This book by Jason Kelly describes and defends his system for buying low and selling high.  Using historical data and just general numbers, he shows why the system works and the advantages of using it.  

In short, as you can see on his website (so I'm not telling secrets) Kelly advocates an 80/20 stock/bond allocation for most investors, and advocates using two mutual funds to implement his system.  Every quarter that the stock portion of the portfolio grows by more than 3%, Kelly advocates selling shares in the stock fund and putting them into the bond fund such that you only keep the 3% gain in stocks, the rest is converted to bonds.  If, at the end of a quarter, your stock fund has not gained 3%, you use the money in the bond fund to buy more stock so that there is a 3% increase in the value of the fund.  The only hitch in the system is that if the value of the stock fund falls far enough, in order to get full value from the system, you may have to put outside money into it.  However, even without the outside money, the system in and of itself, with its discipline of only looking at the gains/losses quarterly and with its determined path of acting on what has clearly happened, will grant you superior returns over the long term.  While you won't beat "Peter Perfect", you'll beat most investors.  

So, why does it take a whole book to talk about a system I described in a paragraph?  Kelly leads readers through probability exercises to show why the system works.  He talks about why predicting the market is so hard, and, in the end, it is so useless to try.  He recommends mutual funds that are appropriate to use in the plan and advises how to put the plan into action.  He even carries you through the life of the plan.  

The system sounds good to me and I wanted to try it with my 401(k).  My husband did not like the idea of that much money in a small cap stock fund.  The compromise is that I am going to stick with the funds I have but use the 3% rule with each.  

I'd like to thank the publisher for making a review copy available via NetGalley.  I do not know how my NetGalley advance copy compares to the final Amazon edition.  However, my NetGalley for my Kindle does not properly display c.harts, graphs etc.  The  NetGalley that I read on Adobe Digital Editions looks fine.    Grade: B

Book Review: Finances Over 50

The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions

About the Book:

The financial world is more complex than ever, and people are struggling to make sense of it all. If you’re like most people moving into the phase of life where protecting—as well as growing-- assets is paramount, you’re faced with a number of financial puzzles.  Maybe you’re struggling to get your kids through college without drawing down your life’s savings. Perhaps you sense your nest egg is at risk and want to move into safer investments. Maybe you’re contemplating downsizing to a smaller home, but aren’t sure of the financial implications. Possibly, medical expenses have become a bigger drain than you expected and you need help assessing options.  Perhaps you’ll shortly be eligible for social security but want to optimize when and how to take it.

Whatever your specific financial issue, one thing is certain—your range of choices is vast. As the financial world becomes increasingly complex, what you need is deeply researched advice from professionals whose credentials are impeccable and who prize clarity and straightforwardness over financial mumbo-jumbo.

Carrie Schwab-Pomerantz and the Schwab team have been helping clients tackle their toughest money issues for decades.  Through Carrie’s popular “Ask Carrie” columns, her leadership of the Charles Schwab Foundation, and her work across party lines through two White House administrations and with the President’s Advisory Council on Financial Capability, she has become one of America’s most trusted sources for financial advice.

Here, Carrie will not only answer all the questions that keep you up at night, she’ll provide answers to many questions you haven’t considered but should.

My Comments:

Over the years I've reviewed a lot of books on personal finance.  Some have been well-written; others, not so much so.  Nevertheless, they have all pretty much been variations on a theme--spend less than you make, save for the future and make wise investment choices.  While this book says all of those things, it says so much more.  

Yes, I'm over fifty.  I've worked more years than I expect to continue working.  I'm seeing people who were middle-aged when I started with my current firm retire,and people a few years older than me move into management.  My children are almost grown, my house is paid for, my parents are no longer with us.   My 401K balance is substantial, at least compared to what it was for  many years, and the contributions are bigger than they ever have been.  My husband and I both consider our jobs to be pretty stable, but neither one of us expects to make substantially more money than we are making now.  In short, we aren't  young adults anymore; we have reached middle-aged success and we are making plans for the next phase of our lives.  Planning for that stage is what is addressed in this book.

The book is divided into five  parts:  I) When Retirement is at Least Ten Years Out   II)Getting Closer:  Transitioning Into Retirement  III)Life in Retirement   IV) Maximizing Social Security and Medicare  V) Estate Planning and VI) The People in My Life.  Each chapter is arranged in question and answer format and addresses such questions as "I'm too busy to manage my money carefully.  Are there any simple strategies for someone like me", "My kids are grown, do I still need life insurance?" "Can I lower my income tax bill now that I am retired" "When should I file for Social Security benefits?" "I want to create an estate plan.  What do I need?" and "I have a child with special needs.  What can I do to make sure she will always be taken care of?".  The advice given seems sensible and lays out options with which I was not familiar.  For example, there is a section on annuities.  In general, the things I've read other places about annuities made them seem like products to avoid.  Carrie Schwab-Pomerantz describes annuities, the needs they can meet and the times it is appropriate to buy them.  She also gives a good description of your options when it comes to Social Security, but sensibly advises you to seek individual professional advice.

Most financial planning books go quickly to the discard stack.  This one is going into the "keeper" folder on my Kindle.  I may even spring for a hard copy.  Grade A.  

I'd like to thank the publisher for making a review copy available via Edelweiss.