Wealth Without Worry
I have read many books on retirement and investing and this is the FIRST book that made any sense, to me. It really simplifies how the stock market works and talks about all of the common pitfallls of investing that we have all tried and found that for the most part, they do not work. Instead of trying to time the market or use some other investment method, this book will tell you how to invest in 13-15,000 stocks and never worry about what the Dow 30 is doing, EVER.
If you are interested in safe investing for growth or retirement income that will consistantly beat the Dow, without all the worry, then this is the book for you.
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How to Beat Wall Street and "Own" Capitalism
What intrigued me about this book is the fact that James N. Whiddon wrote it (with Lance Alston) "for investors who are frustrated with the constant barrage of confusing and conflicting investment information, hit-and-miss approaches, and exaggerated return claims. It was written for those who are tired of having the worries of their financial future rob them of their life's present. For all who ever thought the odds were stacked against them in the investing game, Wealth Without Worry will change all that." That is indeed a bold claim. Whether or not it proves true depends on several factors over which Whiddon has no control. They include an investor's willingness and ability to (a) absorb and digest the contents of this book, (b) identify her or his specific investment objectives, (c) rigorously evaluate or re-evaluate initiatives to-date to achieve those objectives, and then (d) make whatever adjustments may be necessary, not only of specific investment strategies and tactics but also of her or his own values, motives, personality, and character.
Here are some of the questions to which Whiddon responds:
1. What are Wall Street's most popular methods of portfolio management?
2. Specifically what is active management?
3. Why and to what extent is active management misaligned with the best interests of individual investors?
4. When chasing returns, why do so many investors "arrive at the party late"?
5. What to consider before selecting the most appropriate investment help?
6. Which services should the advisor be required to provide?
7. How can the "Seven Essential Questions to Ask When Interviewing an Advisor" (pages 61-67) assist making an appropriate selection?
8. Why are "market returns there for the taking...by not succumbing to the Wall Street shell games"?
9. How to assemble and then manage a "proper portfolio" of investments?
10. Given the responses to the previous nine questions, which three action items should be pursued immediately? Why?
In an article article published in the Dallas Morning News (July 31, 2005), Scott Burns notes that in their book, Whiddon and Alston "point out that a simple diversified index portfolio consisting of four basic index funds (20 percent S&P 500, 20 [percent Russell 2000, 20 percent MSCI EAFE and 40 percent Lehman intermediate government bond) would have returned 12.7 percent a year during the 25 years from 1979 through 2004." Burns goes on to explain why that's "a pretty good return." The 80:20 Market Return Portfolio which Whiddon and Alston recommend includes only 20% committed to fixed income. It "crushed" the returns earned by active managers, returning a "whopping" 14.29 percent...and did so with less market risk. The obvious conclusion is that an index portfolio will almost always outperform a managed portfolio because, as Alston explained to Burns, "With one quarter of the portfolio in one asset class, you might have a chance to outperform with one good fund. But with 15 asset classes, it simply can't happen."
Whiddon and Alston insist that the Market Portfolio Fund enables an investor to "own the market...own the entire casino....[and] own capitalism, which has been successful since it was created." Another bold claim. Obviously, those who read this book must decide for themselves whether or not this is an appropriate investment strategy. My own opinion is that, at the least, it is one worthy of careful consideration.
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