Top Long Term Investing Books
 

Top Long Term Investing Books

Best Selling Long Term Investing Books With Most Reviews



Amazon.com Review

If you're trying to build wealth, sharp market downturns are your worst enemy. And nowadays, they're happening far more often: in the last 18 years, the S&P 500 has experienced sixteen violent declines. Institutions and professional investors have mastered powerful hedging techniques for dramatically reducing the risks of market volatility. Now, you can do it, too--and you can't afford not to. In Buy and Hedge, two leading investment experts show how to apply hedging as part of a long-term program for growing and preserving your assets. CNBC Fast Money guest Jay Pestrichelli and seasoned financial industry veteran Wayne Ferbert show how to systematically protect yourself against violent downward moves while giving your portfolio maximum room to run in upward markets. The authors' techniques are easy to use, can be applied to most investment vehicles, and--once implemented--require surprisingly little "care and feeding." You'll discover how to take advantage of the hedge-building mechanisms built into low-cost index funds… invest in your ideas with confidence, because you've hedged the downside… systematically manage portfolios for risk as well as return… master and apply the "5 Iron Rules of Buy & Hedge"… use options to manage risk, not to create excess leverage… generate more dividends… effectively manage cash… and much more!




Amazon.com Review

Stocks for the Long Run set a precedent as the most complete and irrefutable case for stock market investment ever written. Now, this bible for long-term investing continues its tradition with a fourth edition featuring updated, revised, and new material that will keep you competitive in the global market and up-to-date on the latest index instruments.

Wharton School professor Jeremy Siegel provides a potent mix of new evidence, research, and analysis supporting his key strategies for amassing a solid portfolio with enhanced returns and reduced risk. In a seamless narrative that incorporates the historical record of the markets with the realities of today's investing environment, the fourth edition features:

A new chapter on globalization that documents how the emerging world will soon overtake the developed world and how it impacts the global economy
An extended chapter on indexing that includes fundamentally weighted indexes, which have historically offered better returns and lower volatility than their capitalization-weighted counterparts
Insightful analysis on what moves the market and how little we know about the sources of big market changes
A sobering look at behavioral finance and the psychological factors that can lead investors to make irrational investment decisions


A major highlight of this new edition of Stocks for the Long Run is the chapter on global investing. With the U.S. stock market currently holding less than half of the world's equity capitalization, it's important for investors to diversify abroad. This updated edition shows you how to create an “efficient portfolio” that best balances asset allocation in domestic and foreign markets and provides thorough coverage on sector allocation across the globe.

Review

In the previous editions of Stocks for the Long Run, Wharton Finance professor Jeremy Siegel offered a thoroughly bullish take on the merits of equity investing that has proved highly influential and largely correct through the end of the post-Millennial Bull Market in mid-2007. In the latest edition of this classic, released in a much more difficult period of substantial market declines, Siegel has added important and more nuanced insights derived from his previous and somewhat overlooked book "The Future for Investors," which came out in 2006. Siegel's basic advice to stock investors is to focus less on growth stocks and index mutual funds (eg., Vanguard 500) and more on looking for tried and true stocks that pay high dividends. He argues that such reinvested dividends are the true source of stock returns, or the "El Dorado." (His term). Overall, this argument is well-presented and persuasive.

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.




Amazon.com Review

"As the title of the book suggests, ETFs are going to be an increasingly important reality for a broad class of investors in coming years. This book offers the reader real understanding of this growing force in our economic lives." —Robert J. Shiller, Arthur M. Okun Professor of Economics at Yale University, Co-founder and Chief Economist at MacroMarkets LLC

"ETFs for the Long Run is a fascinating read. A seasoned financial industry journalist, Lawrence Carrel does an excellent job of highlighting exchange traded funds' meteoric rise in popularity over the last few years. A terrific book for anyone looking to grasp the ABCs of ETF investing." —Jerry Moskowitz, President, FTSE Americas Inc.

Review

It really annoys me when a popular columnist/"qualified" expert, at least until very recently (Jeremy Siegel, for instance), is still spouting in 2009 the same old bromides that have cost many people over 50% of their savings in the last 8 months. Buy and hold, diversify, use DRIP plans, avoid load funds, buy anything with a 5-star rating from Morningstar. And, above all else, keep buying stocks. If you put the money in treasuries or bonds or the money market, even in your senior years--or so goes the familiar tale--you'll soon lose out to inflation. Rethink that: the past 6-8 months have demonstrated that you're more likely to have your head handed back to you.

Look at the ten-year averages of some of the most aggressive ("especially" them) "growth" funds, even the highly-regarded ones, and don't be surprised to see that they've been trounced by bonds, the money market, CDs, even a plain old savings account. Or pay the minimum $2500 to get into some marquee stock-picker's mutual fund, and try to pretend after six months, when your investment is worth $600 while the fund is still sporting 5 stars, that it'll come back if you just hang on.

The upshot of all this? Be wary of mutual funds, passive investing, buy and hold strategies. This approach simply hasn't been working, and if Japan's "lost decade" (make that 2) is any model, we could be at a stalemate for many years to come. As a result, the name of the game has suddenly become nimbleness, small and strategic investing, resisting the urge to hit home runs. But you don't have to be an expert in futures and derivatives or become a "day trader" in order to employ such a strategy. This book explains why ETF's are the best solution, and not just for the day trader (who has the time or, for that matter, the "conscience" to spend their lives trading stocks at a video terminal for 8, 10, 12 and more hours a day?) but for the long-term investor.

The book is written for both the neophyte--someone who hasn't even invested in stocks let alone ETFs--as well as the experienced investor, or someone unfamiliar with the the history, structure, and future of these new investment vehicles. It's a thorough, detailed, edifying read. There may be more information here than the average person (moi, for instance) can immediately digest, but if anything has taught us the painful consequences of hastily sacking your money away in a handful of funds and forgetting about it, the past 8 months certainly have.

The author not only provides a fascinating, "human" narrative of ETFs coming to market family by family, but includes the "conflict" essential to a good story. For example, Rob Arnett's introduction of "fundamental" indexing to fund portfolios becomes a shot across the bow to the "capital-weighted" indexing of John Bogle at Vanguard--a painless way for the reader to learn about controversial "efficient market" theory.

Of course, most readers will want, above all, lots of practical advice. The author provides model portfolios and demystifies these relatively new investment vehicles. Following Carrel's advice and examples, any reader will be able to set up a strong portfolio and, with minimal but regular attention, stay on course toward maximizing (or preserving) profits while minimizing risk. More importantly, the investor will be able to realize not merely diversification but a sense of empowerment and control that is lacking in most mutual fund transactions. Finally, as the author explains, you're more likely to save money on sales charges, transaction fees, and tax consequences. (Many people still don't realize how inexpensive it is these days to trade a stock. When I discovered the market circa 1990, stock trades were fifty bucks and more per transaction. Even today, brokerages charge similar fees for trading mutual funds that aren't considered house funds. ETFs, on the other hand, are bought and sold just like stocks--i.e. ten bucks or even less per transaction.)

This is one of the most recent studies you'll find on the subject. It understandably doesn't include developments of the last 2-3 months--many of which are mere gimmicks that don't belong in an investor's portfolio anyway, such as bear funds that triple the movement of the market in inverse order (yet for some reason, guessing right with these bear "ETFs on steroids" will not triple the investor's wealth). And in December many investors discovered that some ETFs are not necessarily as tax-efficient as they had promoted themselves to be. The author does clarify most of these matters and offers sound advice about the solid funds, the ones that the "investor" rather than the "gambler" should concerned with. (I think that it's safe to say that many of the gimmicky new products of the last couple of months are strictly for professional traders, not for investors or hedgers. If you like the psychological comfort of a hedge, short ETFs provide the opportunity. But in the long run, simply sticking with a long position and buying more on the dips could have the same balancing effect.)

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