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The Investment Answer PDF, ePub eBook


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Title: The Investment Answer
Author: Daniel C. Goldie
Publisher: Published August 15th 2010 by Dan Goldie Financial Services LLC (first published January 25th 2010)
ISBN: 9780982894705
Status : FREE Rating :
4.6 out of 5

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The Investment Answer shows you, in clear and understandable language, how to take control of your finances and think about investing in a different way. Whether you are new to finance or an experienced investor, this book is essential reading. Former United States Senator Bill Bradley says that "every American should read this book," and Bob Waterman, co-author of In Sear The Investment Answer shows you, in clear and understandable language, how to take control of your finances and think about investing in a different way. Whether you are new to finance or an experienced investor, this book is essential reading. Former United States Senator Bill Bradley says that "every American should read this book," and Bob Waterman, co-author of In Search of Excellence, remarks, "if I could give only one book on investing to my friends and family, this one would be it." This book cuts through the Wall Street hype to give you just what you need to know. Joe Grundfest, Stanford Law School Professor and former SEC Commissioner, says that "Gordon Murray and Dan Goldie share secrets that Wall Street would rather you not know. Read this book and prosper." The Investment Answer will teach you to take advantage of how markets really work and how to benefit from the wisdom that Nobel Prize winners have acquired over the last 60 years. Nobel Laureate and Father of Modern Portfolio Theory, Harry Markowitz, remarks that "the book offers sound advice, which you will rarely if ever get from a daily financial newscast." Gene Fama, widely recognized as the father of modern finance, says that the book is "an excellent primer for the investor who is not a finance specialist." You probably know the important measures of your physical health: your weight, blood pressure, and cholesterol levels. But do you know the important measures about your investment health? Is your advisor is a fiduciary who really works for you or for his firm? What is your percentage mix of stocks, bonds, and cash? How much you are paying in fees and investment-related taxes? Most of us can't answer these important financial questions...but we must. This book will help you become a smarter investor and a better steward of your money.

30 review for The Investment Answer

  1. 4 out of 5

    Jane

    Where I got the book: my local library. Trying to get a better handle on money...a bit late possibly at 53! This book was recommended to me by a financial advisor. It's very much oriented to the stock market rather than money management as a whole (and explains why) but for a short read I found it to be pretty thought-provoking. It promotes a very straightforward, unaggressive approach to investing which, while it probably won't make anyone rich, is less likely to leave you with an empty portfoli Where I got the book: my local library. Trying to get a better handle on money...a bit late possibly at 53! This book was recommended to me by a financial advisor. It's very much oriented to the stock market rather than money management as a whole (and explains why) but for a short read I found it to be pretty thought-provoking. It promotes a very straightforward, unaggressive approach to investing which, while it probably won't make anyone rich, is less likely to leave you with an empty portfolio and a bitter heart. I learned some things: - the differences between different types of financial advisor, and whether or not they have a fiduciary relationship with their clients; - the difference between active and passive portfolio management; - why it's a good idea to rebalance your portfolio regularly; - why stocks and bonds tend to be a better deal than fancy-schmany investment instruments. Hmm. With old age (I won't say retirement because neither of us WANTS to retire) looming ever closer and the interest on bank accounts a joke, such matters are worth investigating. If you already have opinions on the stock market, you'll probably hate this book. But if you're like me and just want someone to suggest a relatively low-risk strategy, go ahead and breeze through its 96 pages.

  2. 4 out of 5

    Jo

    My dad gave me this book in 2011. I thought it was ok, though he wrote all over the margins never to use a financial advisor so I'm not sure this book where they recommend financial advisors (as financial advisors themselves not shocking) was the best choice. Was a little annoyed by the male pronoun throughout, never gender neutral or she. Women need an investment answer too!

  3. 4 out of 5

    Rebekah

    So concise and easy to read!

  4. 4 out of 5

    Paul Eckert

    To call this book the investment “answer” is a bit of a misnomer. Or rather, it would’ve helped to know what the “question” was. There are no hard and fast answer in this book, as the title may lead one to believe. Of course, there are no easy answers when it comes to investing, and this book admits this up front. Rather, the aim of The Investment Answer is to simplify the various facets of investing into a set of decisions one must make, and this the authors do very well. According to the autho To call this book the investment “answer” is a bit of a misnomer. Or rather, it would’ve helped to know what the “question” was. There are no hard and fast answer in this book, as the title may lead one to believe. Of course, there are no easy answers when it comes to investing, and this book admits this up front. Rather, the aim of The Investment Answer is to simplify the various facets of investing into a set of decisions one must make, and this the authors do very well. According to the authors, the five decisions an investor must make are: 1. Should I do it myself, or go with a financial advisor? 2. What kinds of assets should I invest in? (stocks, bonds, cash, etc) 3. How should I diversify my portfolio? 4. Should I actively or passively manage my investments? 5. When and how should I rebalance my portfolio? Overall, I think the authors make a really good case in most categories. They show the reader how actively managed funds rarely beat their benchmark, and how different assets perform over time. In each category they caution investors against making the type of mistakes that people are coaxed into making by popular media, like the idea that one can beat the market. And with each type of investment, they talk briefly warn about the risk involved. The only problem I had was the authors’ endorsement of financial advisors. I don’t understand why, in an age where it’s easier than ever before for someone to do their own investing online, someone would need a financial advisor. Perhaps if you have more money than you know what to do with, they could be an option. However, they provide plenty of data to show that few people ever beat the market, and almost never with consistency. Where is the data that shows that financial advisors outperform DIY investors? Their claim is that financial advisors have resources available to them, but if all the research in the world can’t beat a simple index, what is a financial advisor going to differently? In my view, if someone has educated themselves about investing, they can just as easily do what a financial advisor does, and much cheaper. Even if he doesn’t achieve the returns that an advisor does, he may make a similar return because he doesn’t have to pay the advisor a percentage of his investments. On the plus side, they do differentiate between the different types of advisors, and which ones rarely work in your favor. All in all, the book provides a good foundation for investment knowledge, and it does filter out all (or most) of the bad information one gets from popular media, as well as providing the sensible alternative. I’ve educated myself quite a bit in personal finance, and I still learned a few things. The structure of their “decisions” is easy to remember and provides a starting point for every investor. I recommend it. Hell, it’s only 60 pages, and it could open your eyes to simplifying your investing life.

  5. 5 out of 5

    Mariah

    My dad gave me this book like 5 years ago and annotated it. It took me one subway ride from cobble hill to the upper west side to read it. Very accessible, makes investing seem simple and like something you can accomplish without much experience just with simple guidelines.

  6. 5 out of 5

    Viraj

    One of the two authors (Dan) was Wimbledon quarter-finalist! The book has good information succinctly given with a good financial advice similar to the ones by John Bogle and Burton Malkiel. in short, invest in stock market with index funds with good diversification (international vs. US, stocks and bonds) and keep rebalancing annually to match / beat the market over the long term. Avoid timing the market and high fee / trading. Excellent succinct and good advice for most folks.

  7. 4 out of 5

    Drew

    Excellent book about investing. Debunks a lot of the mystery. I'll read it again.

  8. 4 out of 5

    Claudio

    It takes around one hour to read and it's a must if you don't know where to start with your investment strategies.

  9. 4 out of 5

    Erica

    Yep, I need to get a financial planner.

  10. 4 out of 5

    minhhai

    Very concise book on personal investment. The advice are clear, straighforward and simple. They align very well from other financial workshops I attended. I agree with most, if not all, the advice in the book: let's play a defensive personal investment and stay to the mean. There are chances for one to "beat the market" but that requires extra investment in time and effort, so the total benefit would be minimal. The book doesn't go too far into how much (percentage) one should invest in bonds, sto Very concise book on personal investment. The advice are clear, straighforward and simple. They align very well from other financial workshops I attended. I agree with most, if not all, the advice in the book: let's play a defensive personal investment and stay to the mean. There are chances for one to "beat the market" but that requires extra investment in time and effort, so the total benefit would be minimal. The book doesn't go too far into how much (percentage) one should invest in bonds, stocks, etc. Although that is almost of personal preference, a quick guideline will be very helpful for those who are new to investment like myself. This book provide a general advice on diversification, but it's totally up to readers to design their porfolios.

  11. 4 out of 5

    Kaylah Hancock

    This was a short, simple book to get your feet wet about investment. There wasn't much that I learned from the book, but that is because I majored in finance and this knowledge is pretty much ingrained into you. This would be a good book for someone who doesn't know a thing about investing and it gets the mind thinking. It was a good and bad thing that it was so short. On one hand it was concise and got straight to the point (I finished this in about an hour and a half), but on the other hand it This was a short, simple book to get your feet wet about investment. There wasn't much that I learned from the book, but that is because I majored in finance and this knowledge is pretty much ingrained into you. This would be a good book for someone who doesn't know a thing about investing and it gets the mind thinking. It was a good and bad thing that it was so short. On one hand it was concise and got straight to the point (I finished this in about an hour and a half), but on the other hand it's very broad and high level, and I missed some more in depth analysis.

  12. 5 out of 5

    Scott

    I hated this book, but that is because I take an active role in managing my money, not just ship it off for someone else to worry about. It does give somewhat good advice if you don't want to learn anything. The "answer" is to hire someone else to think about your money. Oh and diversify against a range of asset classes, stick with index funds, rebalance your holdings at regular intervals. Solid advice, but could have been given in a couple pages.

  13. 4 out of 5

    Justin

    This book doesn't reveal much new. It also begins by talking about what kind of advisor one should use. Considering that one author is a CFA/CFP there is a pretty huge bias here and there is a bit of denial there by putting that as the first chapter. It is possible that author's address the downsides of adding an advisor but I didn't see it or get the feeling it would be there.

  14. 5 out of 5

    Justin

    Very quick and easy read not nothing earth shattering. If you know nothing about investing, i highly recommend you pick up this book from the library (not worth the cover price). If you work in finance or have a educational background in economics there isn't anything you'll learn in here, but it's a nice refresher.

  15. 4 out of 5

    Daeus

    Solid quick overview of investing, specifically on helping to distinguish investing vs speculation. Some interesting tidbits: - The median life of a hedge fund is 31 months. - Commodities do not generate earnings, pay interest, or create business value. They are a speculative bet where there is a winner and a loser at the end of the trade. Did not know that but makes sense now.

  16. 5 out of 5

    Patrick

    Sometimes the right answer is boring JDN 2456440 EDT 11:26. I found The Investment Answer by Daniel Goldie and Gordon Murray in a rack of free books, and the little softcover is only 70 pages long, so I figured I may as well read it. I was not disappointed; the book is a concisely written and easily accessible introduction to behavioral finance for anyone who is looking to invest in stocks and bonds. Its answers are rather banal: Buy low, sell high; don't trust your gut, use careful analysis; inve Sometimes the right answer is boring JDN 2456440 EDT 11:26. I found The Investment Answer by Daniel Goldie and Gordon Murray in a rack of free books, and the little softcover is only 70 pages long, so I figured I may as well read it. I was not disappointed; the book is a concisely written and easily accessible introduction to behavioral finance for anyone who is looking to invest in stocks and bonds. Its answers are rather banal: Buy low, sell high; don't trust your gut, use careful analysis; invest in a diversified mix of stocks and bonds; avoid trendy new investments with unclear risks; don't try to game the system, just ride the market. All of these are far less exciting than the people telling you to buy this one thing—hedge funds, gold, whatever it may be—and become a millionaire overnight. Yet, they are far more likely to actually work. Passive fundamental value investing is the one strategy that really does work consistently. It doesn't produce enormous, exciting gains; but it also doesn't produce enormous, painful losses either. (Warren Buffett is actually sort of a passive fundamental value investor, though the alchemy he works with markets is one that I don't think anyone but he understands.) Goldie and Murray are too enamored of the so-called "efficient market hypothesis" (which, if you read its assertions carefully, is clearly just the unpredictable market hypothesis) for my taste; but they make use of it in a mainstream neoclassical way that's hard for me to object to all that much. Their basic message is: Don't try to be clever, don't try to become a millionaire overnight, just buy into companies that you expect to make profits so that you can get a share of those profits. They try to point out the difference between investment and speculation, which is certainly important; but their explanation leaves much to be desired. Here's how I would put it: Investment is when you buy something that makes people better at making things. You can do that indirectly through multiple steps; but ultimately it must be making someone better at making things. A crane is investment. A college education is investment. A bridge is investment. Buying stock can be an investment, if the money goes to the company and is used to finance such purchases to grow the business. Investment is nonzero-sum; it is a game that everyone can win. Buying bonds usually is an investment, because the government will spend it on things like education and infrastructure. Speculation is when you buy something in the hopes of selling it to someone else later for more money. Commodities, gambling, high-frequency trading, currency trading, and most hedge fund strategies are speculation. Speculation is zero-sum; someone always wins and someone else always loses. The problem is that most of what we call "investing" is really speculation. Those "investors" on Wall Street are really just speculators. The "trades" they make are really a sophisticated way of tricking people into giving them money. "Isn't that just capitalism?" No. Not at all, in fact. The whole point of capitalism is investment; the goal of capitalism (which admittedly it does not always succeed at) is not to decide who gets the stuff, but to make more stuff, so that everyone can have some. Perhaps the easiest well to tell a true investor from a speculator is to look at the time horizon of their trades. Warren Buffett makes a few trades per year. This makes sense; over a period of months or years, a company can actually change enough that you would want to reconsider whether you've invested in it. Meanwhile, there are high-frequency trading algorithms on Wall Street that trade in microseconds. Stiglitz proposed the extremely reasonable idea that we limit trades to seconds, but Wall Street would not have it. I don't think I really need to explain why a company obviously can't have changed its real profitability in a millionth of a second. I'm sure Goldie and Murray would agree. There is one glaring omission from The Investment Answer however: No mention whatsoever of ethical investment. The entire book is about how to make more money in markets, and it explains quite well how to do that. But it never asks the fundamental question: How are we making money? Where is this value coming from? And I'll admit, these are by no means easy questions. Sweatshops abuse their workers; but at the same time, they provide desperately-needed jobs in poor countries. Buying American goods will reduce our trade deficit; but it might also hurt everyone, if it ignores comparative advantage. The most die-hard neoclassical capitalists (which Goldie and Murray may well be) would say we should just act in our own self-interest and let the Invisible Hand play itself out. But this of course is easy to say for the rich White American males who have the power; yes, let it play itself out, in such a way that just so happens to benefit me enormously and allow millions of other people to suffer. There are simply too many externalities to take the Invisible Hand seriously; what I do affects you, and as such I must consider your interests as well as my own. Fortunately, ethical investment is something that Bill Gates and Warren Buffett do understand (and they clearly have no trouble making money either!), so I'm kind of hoping they'll write books about it someday.

  17. 5 out of 5

    Flo

    This book gives you superficial information on how to create proper investment portfolios, and doesn't go into much detail with the concepts they introduced in the book. I was a bit disappointed by this, but nonetheless, it's worth a read.

  18. 4 out of 5

    Usama Siddiqui

    Good book for someone(like me) who don't know much about stock investment. This book is written by keeping in view the US Stock Market but the principles laid down in the book can be applied to almost in any non-US stock market.

  19. 5 out of 5

    Tally

    For my first personal investment book, this is a gem. Basically "Investing for Dummies". Read it all in one sitting which is stated as being one of the missions of the book! Great for learning the basics and avoiding behavioural tendencies that can cost you money.

  20. 5 out of 5

    Eric

    Goldie's #1 suggestion: hire a professional investment manager because it is too complicated to manage by yourself. Goldie's #2 suggestion: invest passively in indices because no manager is able to beat the system.

  21. 5 out of 5

    Caligo Pollux

    It's really hard to have an opinion on something non-fiction when the information seems solid. So, all in all, I think this will be a helpful book for many. It's a short read but it's got a lot of helpful information.

  22. 5 out of 5

    Nico Alba

    An excellent primer on the world of investing. The authors give you the basics: types of investments, how to investment, and tips to increase your chances of making money in the game. Quick read, but very useful.

  23. 5 out of 5

    Ramya

    Good quick read to place you on solid ground as to what historically has happened to investing vs speculating what will happen when investing. Truly helps you decide if you want to “invest or speculate” with your money.

  24. 5 out of 5

    abdullah

    كتاب رائع، مبسط ومختصر. انصح به للمبتدئين اما من قرأ عن الأسهم والاستثمار سابقًا، فلن يرى هناك اي شي جديد يقدمه الكتاب

  25. 4 out of 5

    Steven

    Concise and with a clear overarching message: “don’t fool yourself into thinking that you can beat the market.” My only complaint is that the book is a bit jargon-y.

  26. 4 out of 5

    Xavier Shay

    Good short summary, solid advice. Nothing new for me, but probably going to be the book I recommend to others. Can get through it in about 60 minutes.

  27. 4 out of 5

    Joshua

    Unfortunately succeeds in saying very little by... saying very little.

  28. 4 out of 5

    Annmarie (Annie) Kostyk

    Incredibly vague, limited information. I've read better overall investment advice/instruction in an article.

  29. 4 out of 5

    Derek Harlow

    Tells you to use passive mutual funds and diversify because it gives you the best returns over time with the least amount of risk. Also, don't choose funds or managers who charge much.

  30. 4 out of 5

    Jacob Wadlington

    Gets to the point and makes a good point. Explained an investment strategy that you can actually follow.

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