Outstanding book for the semi-sophisticated investor but not quite everything you need

books:

	• Unconventional Success: A Fundamental Approach to Personal Investment David F. Swensen Free Press, 2005 - 403 pages average customer review:based on 89 reviews view larger image
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highly recommended

Outstanding book for the semi-sophisticated investor but not quite everything you need

Written by one of the brightest and most successful money managers, the book has straightforward advice on what assets should makeup a portfolio and what assets (and providers) should be avoided. He definitely picks a few bones with the mutual fund industry which of course has been done before in such books as "The Intelligent Asset Allocator" by Bernstein and "A Random Walk Down Wall Street", corporate governance etc. As mentioned elsewhere he also goes into detail about the importance of rebalancing your portfolio.

Pros:

1. Gives advice on companies which can be trusted and provide products and investments where the investors objectives are aligned with the products (stocks, etfs, government bonds etc).
2. Lists specific indecies and providers he favors over others. There are tons of etfs out there so it's helpful to see a list he likes. He goes into detail about why some are more efficient then others.
3. Straightforward writing and sections. Easy to skip things you may already know (e.g. most mutual funds should be avoided).
4. Written by someone whe has done this with great success himself.

Cons:
1. Spends long sections in the book going into perhaps too much detail on specific examples of assets to avoid.
2. Regarding #1, I would have preferred more detail on specific allocations and products he likes and how we should use them best.
3. His own asset allocation at Yale includes a substantially different asset mix but he never gives detail on why Yale buys these things (e.g. Hard Assets) but individuals can or should not.
4. No advice on any sample portfolio.
5. Some mention of DFA would be nice.

In the end, I still prefer William Bernsteins "The Intelligent Asset Allocator" but this book is right up there and is one of the best I have read in years (and I have read most all of them).

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Very Good, but Incomplete

While Swensen touches on key issues also raised by others such as Malkiel, Bogle, and Merriman, he adds very good value from insights experienced from his success in growing the Yale endowment portfolio.

High Points

He brings a unique and valuable perspective on issues such as: how full service Wall Street firms are out to stiff you; why corporate bonds and foreign bonds don't make sense as core assets; how the Russell 2000 index is fundamentally flawed; why periodic rebalancing is important for long term returns; identifying core asset classes that offer inflation protection.

Low Points

He doesn't address some key areas for individual investors. Are low-cost bond funds a better choice than laddering given Wall St transaction costs and lack of bond pricing transparency? What weight should be given to value stocks and to small cap / micro cap in his core equity classes? If the Russell 2000 is a poorly constructed index, what is a good alternative? Are Vanguard and TIAA/CREF the only fund games in town? Based on the Yale experience, what is a good withdrawal strategy for the retired investor?

Overall, I found Malkiel (A Random Walk Down Wall Street), Bogle (Bogle on Mutual Funds - New Perspectives for the Intelligent Investor), and Merriman (Live it Up without Outliving Your Money! : 10 Steps to a Perfect Retirement Portfolio) to be better starting points for understanding a fundamental approach to investing; with Swensen adding additional insight in selected areas.

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you can find good investment advice

David Swenson while having done a fantastic job for Yale fails to understad what the individual investor goes through,especially in bear markrts,and in fact there are many financial advisors who have added value to investors portfolios. Do it yourself doesn't work. The late nineties proved that.

I wish I'd read it years ago

Of course, the book was just recently published, I know that! But, it would have saved me making some egregious errors over the years. Every generation needs cautionary tales retold in contemporary words.

What I like best about this book is that the author not only tells you what to do but, why, with some documentation. Beware the big bad wolf. Buy sheep, sell deer, and my other favorite: bulls make money, bears make money, pigs don't make money, (unless they're mutual fund managers.)

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bashing utual funds

Good overall critique of the mutual fund industry. He suggests investing in index funds. The problem wirh the S&P 500 is that it gets overweight in particular industries like tech stocks during the 1990's. As a result, when the market tanked, the S&P tanked greater than it should becuase the tech stocks had increased from 10 percent of the index in the early 90's to 32 percent at the end of the 90s.

Also he should have given more examples of mutual fund companies that he believes puts the interest of the consumer first.

reviews: 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, page 14, 15, 16, 17, 18

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