Tim Hale

I was looking for something new to read about personal investing and came to this book because of good reviews on Amazon and in the press. Essentially, the author lays out a methodology which encourages the reader to *really* think about a number of factors before they invest. For example: What are they investing for ? Time-frame ? Returns required or planned for ? Risk tolerance ? etc. Asset allocation is really focussed upon and the importance of minimising costs (or 'losing-the-fewest points') is continually hammered home. The aim is to help the investor develop an investment framework they have confidence in and then stick to it and be consistent, even when the portfolio is not doing well. This may not seem particularly original but there is a clarity and authority about the writing which really helps make the case. The author is also consistent in always attempting to look at as much historical data as is possible (typically 100 years) which makes a change from so many books which only seem to go back as far as the 1970s or 1980s. This long-term viewpoint also has the benefit of really showing how much volatility there can be in different markets and how over- and under-performance can last for many many years. (This in itself is quite sobering.) In short, this is an excellent book and I am recommending it to friends as an essential read on personal finance.… (mais)

I was looking for something new to read about personal investing and came to this book because of good reviews on Amazon and in the press. Essentially, the author lays out a methodology which encourages the reader to *really* think about a number of factors before they invest. For example: What are they investing for ? Time-frame ? Returns required or planned for ? Risk tolerance ? etc. Asset allocation is really focussed upon and the importance of minimising costs (or 'losing-the-fewest points') is continually hammered home. The aim is to help the investor develop an investment framework they have confidence in and then stick to it and be consistent, even when the portfolio is not doing well. This may not seem particularly original but there is a clarity and authority about the writing which really helps make the case. The author is also consistent in always attempting to look at as much historical data as is possible (typically 100 years) which makes a change from so many books which only seem to go back as far as the 1970s or 1980s. This long-term viewpoint also has the benefit of really showing how much volatility there can be in different markets and how over- and under-performance can last for many many years. (This in itself is quite sobering.) In short, this is an excellent book and I am recommending it to friends as an essential read on personal finance.… (mais)

With financial stuff in the news these days, both national and international it can often feel bewildering trying to work out how to deal with your money. When it comes to domestic budgeting I feel pretty confident in my abilities but when it comes to savings and investment I am a newbie. There are two things that I find extremely frustrating when it comes to these things. The first is that many of the financial products available are very complex and require a new language just to navigate them. The second is that savings interest rates in the UK are shamefully low, this is further eroded by tax and inflation. This means that savings lose value in real terms over time and I feel lost when it comes to taking steps to combat this. I have traded shares in a few companies in the past but it has been dumb luck that has prevented me from making a loss. I had hoped that this book would clear up a lot of the financial confusion and it came highly recommended on financial sites I have read.

The book starts off with a great chapter on how investing and saving works, the products available and the risks involved in these products. Although I was familiar with some of these things there were many that were new to me and they were all very clearly explained. The risks are something that can be skipped by some writers but these are explained and it is also explains how you can do further research into these risks. One thing that I would have fallen for in the past is that almost all funds advertise their performance over the previous three years. When you are investing for a period of up to thirty or forty years this is far too small a time frame on which to base decisions.

The middle of the book covers what the writer feels is the best way to construct your portfolio. The main basis of this is to spread your risks across an international portfolio made up of a variety of products dependent on the risk you are willing to take on. Funds are particularly well covered in this book and the writer goes to great lengths to back up his theories with facts and figures. He also is keen to emphasize that active funds make one group of people rich, fund managers. He argues that a very small minority of people manage to beat the market and the odds of you finding the people that can do this are very small. Everything is backed up with facts and figures and research from very reputable sources.

The final section is the nuts and bolts of creating your portfolio. I have to admit that I scanned this section as I am not ready to do this yet. This part of the book requires a fair amount of work on the part of the reader but this is no bad thing. There is also a section to help you decide whether you need to enlist the help of a financial adviser and what to look out for if you do. I have read books in the past which say that you have to use an adviser but there are times when this might not be needed and indeed would be waste of money. Knowing exactly what an adviser can and cannot do for you is a welcome addition.

If you are interested in understanding more about investing, especially in the UK, I would recommend this book.… (mais)