The 3 Simple Rules of Investing: Why Everything You've Heard About Investing Is Wrong—and What to Do Instead
by: Michael Edesess (0)
What if the most effective investment portfolio was also the easiest to manage and the least expensive? As the authors of this clear, practical, and enlightening book—part financial guide, part exposé—prove, there are just three simple rules you need to follow and only a few, very inexpensive investment products that are necessary for an ideal portfolio. The authors deftly bust investing’s myths—what they call investing’s Seven Deadly Temptations—and dispense with all the complicated, confusing, and self-serving advice of the Wall Street wolves. By embracing commonsense solutions and rejecting investments that seem enticing but are overpriced, needlessly complex, and risky, you’ll put not only yourself in a stronger position, but the entire economy as well
The Reviews
Even though the data is somewhat old, the advice and conclusions seemed on target. I would have liked to have seen more on real estate or other inflation alternatives. However the basic prescription of a mix of inflation indexed bonds and a low cost total market mutual fund.
Good book.It opened my mind to new ways of handling my investments.I thought that the 50/50 mix of a world market etf and TIPS was interesting,plus having never to rebalance.
The authors provide convincing arguments that should push readers to a world of less stress, less complexity and some satisfaction in knowing that the prescribed simplification results in portfolios that, while not designed to beat the market, will beat the large majority of other potential portfolios when costs are considered. Ultimately it provides a blueprint for avoiding the unnecessary and large cost of most financial industry products.There is a nice mix of proscriptive (e.g. don't do this) and prescriptive. It has good lessons, especially for someone new to investing. I don't recall any formulas or any significant math, just descriptions of the results of the math. This makes it easy to grasp. If there was one area where more could have been provided it would be how to allocate among the very simple instruments. Also, maybe an appendix showing how some of the results in the examples that were provided were calculated. For instance, there is an example showing the simple portfolio in action. Beth wants to guarantee some amount of cash flow and use the market for upside. But unfortunately the detailed how-to calculations are not included: "Either she or her advisor calculates that investing half her portfolio, 50%, in TIPS will secure that guarantee". I have not checked, but maybe detailed calculations exist on their website.
If you are thinking of using a professional financial adviser, take an hour or two to read this book. The authors do an excellent job of explaining how you should invest, and most importantly why working with an adviser could cost you large sums of money. If you want more information I recommend reading Unconventional Success by David Swensen, or The Smartest Investment Book You'll Ever Read by Dan Solin.
Great information to learn a good strategy
I enjoyed this book and liked reading a different perspective than many other investment books.
For years I have been trying to drive down my investment expenses to near zero, and this book clearly explained that this was indeed the most important thing to do, and why. It's a short read, but that's because its message is not complicated.
If you've ever read the 48 Laws of Power you understand the power of creating a cult followingThis book uses a lot of half truths, cherry picked data, citing of smart sounding references, and even cherry picks Markowitz himselfFor a disciplined individual, this book basically says to buy simple index funds, term life insurance, etc and avoid overly complex and expensive investments. That, in itself is pretty good advice, but you have to get through a bunch of fluff and emotional gearing.You would probably get better content from Vangaurd's website.
