Absolutely the best investment book ever written, BUT....

books:


	• Unconventional Success: A Fundamental Approach to Personal Investment David F. Swensen Free Press, 2005 - 403 pages average customer review:based on 86 reviews view larger image
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highly recommended

Insight From a Legendary Institutional Investor

David Swenson explains that, as the leader of a sophisticated team of full-time investment professionals, he produced an unparalleled 20-year annual return of 16.1% for Yale University's endowment fund. The high returns are achieved, in large part, because of the endowment's tax-exempt status which enables the investment team to engage in frequent trading necessary to conduct day-to-day real-time "portfolio rebalancing" while avoiding the adverse tax consequences associated with realization of capital gains. Few institutions and even fewer individuals have the resources necessary to conduct the trading activities which helped achieve these high returns over the long term, but now, ordinary investors have heretofore unavailable access to passively managed index funds and exchange-traded funds which provide them with opportunities to achieve reasonable returns. Index funds have been available to institutional investors for a long time (John Bogle's Vanguard 500 Index Fund was the first; Lee Kranefuss of iShares invented the etf in 1971), but not to most ordinary investors, who are blissfully unaware that nearly all of the actively managed mutual funds available for their defined-contribution retirement plans fail to keep up with benchmark indexes over the long term, ironically because of the funds' trading activities, and because of their tax disadvantages and wide range of parasitic fees, commissions, kickbacks and other assorted rakeoffs, including 401(k) pay-to-play bribes. Most investors don't know the difference between "actively managed" and "passively managed", and many of them are lulled into blissful ignorance by the cult of money-management personalities, brand-name attraction, and investment spin which misleads investors by distracting attention from meaningful details. Swenson recommends that ordinary investors should investigate the opportunities now available by investing in passively managed index funds and etfs, and he provides suggestions for setting up relatively simple, diversified portfolios without any actively managed funds. Investing in just one holding, an S&P500 index fund or etf, provides the equivalent of a 500-stock portfolio, diversified over many sectors. Actively managed fund real returns are, for the most part, pathetic, especially when considering the high compensation paid to the managers, the fund companies` profits, management failure to beat the benchmarks, and the investor's potential tax consequences. The book is easy to read and understand, and there are plenty of tables and charts which help to illustrate the concepts. Highly recommended, especially for those who want a realistic view of the mutual fund industry.

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Good Material; Long-Winded

Provides a good assessment of various investment strategies. Definitely not written at the eight-grade reading level! He could cut back on some of his ax-grinding about Wall-street people and mutual funds (although, granted, his points are well-taken) and shorten the book to maybe 30% of its current volume. Not to be too negative, there is good, valuable information to be gained from this book.

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Just What the Money Doctor Ordered!

I appreciate this book more than any other financial book I have read in a long time. I should be writing a commission check to David Swensen right now for all of the money mistakes he has prevented me from making in this well written and informative book. Yes, it is a difficult read. It is not "Investing for Dummies" but the chapters are articulate and extremely thorough.

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Absolutely the best investment book ever written, BUT....

THIS IS NOT FOR BEGINNERS! Probably not even the average investor. (And this is the simplified version of Mr. Swensen's "Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment"!) It is dull and dry. That is unless, you happen to be a serious investor. In which case it is simply a page turner. As clearly as Mr. Swensen lays out a very compelling approach to investing, the truth is, unless you have passed two or three finance classes with flying colors, the genius will go right over your head.

Is this book for you? Take this quiz.
1) Do you know what bond duration is and its significance when investing?
2) Can you explain how correlations of asset price movements can be used to reduce investment risk?
3) Do you know what a portfolio's turnover rate is?
4) Do you know the difference between market-cap-weighted indices and equal-weight indices?
5) Or, would you be excited in learning why the construction of Russell indices is inferior to those of S&P indices for investment purposes?

If the answer to any of the above is no, then take two finance classes at a local college, AND THEN read this book!!

Else you will be left 1) taking it all as simply a matter of faith, or 2) wishing you had bought Donald Trump's ridiculous "Why We Want You to be Rich".

If you can't do the above, then don't worry about learning how to invest. Just buy mutual funds from AARP (they are excellent and constructed much along the lines described in this book), and spend your time doing something you enjoy. You'll be financially more successful and have more fun!

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Excellent Book on Mutual Fund and General Investing!

My first 5-star review!

It's not 5-star due to any brilliant writing on David's part, in fact many a reviewer notes how he dryly plods along - even the title is a light rant on how most people would rather fail following convention wisdom instead of succeeding un-conventionally by following a consistent (non-media influenced) financial strategy.

No, this book is a 5-star book because it is one of those few books that may truly, positively impact your financial life.

In it, David describes how greed finds a way as "Wall Street" beats "Main Street" almost every time. He describes how most actively managed mutual funds fail to beat the market and how you can best succeed by constructing a stock oriented, broadly diversified portfolio (Domestic stocks 30%, Foreign stocks 15%, Emerging market equity 5%, Real Estate 20%, US Treasury Bonds 15%, US Treasury Inflation Protected Securities 15%). He then goes on to discuss many related topics such as investor behavior, media and government actions, tax impact, rebalancing, the antics of the investment industry, etc.

This book is not for the faint of heart, but if you put in the effort to finish it, you'll be well rewarded by a solid understanding of the Investment Industry and hopefully you'll walk away with a few action items for your financial future.

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reviews: 1, 2, 3, 4, page 5, 6, 7, 8, 9, 10, 11, 12, 13, 14

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