Chapter 11 – Final Thoughts, References

Chapter 11

Final Thoughts, References, Glossary


While this investment primer touches on proper investment fundamentals, it isn’t intended to cover all you need to know. Following up with one of the suggested books will help solidify new concepts. And reading the primer first will help you digest the book material more easily.

I hope I have given you an idea of the mountain of research, data and facts that exists on the subject – information that you won’t find by asking an industry that prefers you remain in the dark. I also hope you have developed a warning radar for detecting information, suggestions and advice that are in conflict with your best interest

Investing in stocks is a way to generate future income, but it isn’t the only way and it requires that you take risk with your money–but it is a risk that has provided results worth the risk. Settle on a risk/reward measure that will help you achieve your goals while protecting what you’ve accumulated, not one designed to beat the market average. There are no hurdles you need to jump–balance risk against a reasonable return. Investing is not a competitive sport—don’t get fancy, and don’t listen to TV or magazine hype—what Jane Bryant Quinn calls “investment porn.” Ignore temptations to go after hot funds or choose funds based on recent past performance.

If stock returns came from history books, then the wealthiest people would be librarians.”
Warren Buffett

Managing your money is about the unglamorous task of being a defensive lineman, not the star quarterback.” Ben Stein, Phil DeMuth – authors of several investing books.

Don’t begin by looking at funds. Do a risk analysis and choose an allocation first, then figure  out how you want to diversify your investments – large caps, small caps, international, REITs, value, blend and growth. Only then should you consider funds.

If you’re just starting out, you may not have enough to invest to meet the fund’s minimum investment in every category. If not, then look for target retirement funds, or other funds that give you exposure to several funds in one. Also look at balanced funds that contain both stocks and bonds. If you have already accumulated a larger portfolio, the process is the same, but you might wish to choose individual funds to fill your diversification slots.

The most important investment a person can make is in education.

Good First Books
“The Bogleheads’ Guide to Investing” by Taylor Larimore, Mel Lindaur and Michael LeBoeuf
“The Coffeehouse Investor” by Bill Schultheis
“The Informed Investor” by Frank Armstrong

The Big Investment Lie” by Michael Edesess
“The Investor’s Manifesto” by William Bernstein

Books with More Depth
“John Bogle on Mutual Funds” by John Bogle
“Common Sense on Mutual Funds” by John Bogle
“Four Pillars of Investing” by William Bernstein
“Random Walk Down Wall Street” by Burton Malkiel
Any book by Rick Ferri or Larry Swedroe

Behavioral Finance
Why Smart People Make Big Money Mistakes” by Belsky and Gilovich
What Investors Really Want” by Meir Statman.
“Predictably Irrational”, by Dan Ariely
“Behavioral Finance and Wealth Management” by Michael Pompian
“The Little Book of Behavioral Investing” by James Montier

Free Online Books
Investing for the 21st Century” by Frank Armstrong
http://www.investorsolutions.com/uploads/documents/Investment_Strategies_21st.pdf

Serious Money, Straight Talk About Investing for Retirement” by RickFerri,
http://www.portfoliosolutions.com/research-books-6.html

For General Information on Investment Basics
http://www.moneychimp.com/
http://www.Bogleheads.org (general information, recommendations, discussions based on MPT)
http://www.coffeehouseinvestor.com
http://www.jasonzweig.com/ (articles)
http://www.Bogleheads.org/wiki

Advanced Information and articles on Investing
http://www.altruistfa.com/readingroom.htm (many good articles)

For General Information on Mutual Funds
http://www.bogleheads.org/wiki/Bogleheads_Reference_Library (Reference Library)
http://www.bogleheads.org/wiki/Category:Mutual_Funds
http://www.morningstar.com (fund information and leaning center)
http://www.troweprice.com
http://www.vanguard.com
http://www.Fidelity.com
http://www.fundalarm.com

For Advanced Information on the portfolio selection method (modern portfolio theory)
http://www.efficientfrontier.com/index.shtml (theory and practice)
http://homepage.mac.com/j.norstad/finance/index.html (academic articles)

For Information on Exchange Traded Funds (ETFs)
http://www.indexuniverse.com/index.php
http://www.nasdaq.com
http://www.ishares.com

For Information on 401k and IRA
http://www.401khelpcenter.com (401k help)
http://www.irahelp.com/ (IRA help)
http://www.403bwise.com/
http://www.bogleheads.org/wiki/Main_Page

For Information on Financial Planners
http://www.napfa.org/
http://www.cfp-board.org
http://www.garrettplanningnetwork.com/
https://www.cfainstitute.org/pages/index.aspx

For Information on Retirement Withdrawals
http://www.bobsfinancialwebsite.com/

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