I just got this in the mail recently and finally got a chance to read through it. It’s titled “Investing Essentials”, by Kenneth Morris and Virginia Morris. It’s actually barely a book, more like a pamphlet (20 pages long including glossary). It looks like a condensed version of Wall Street Journal Guide to Understanding Money and Investing, by the same authors.

From the cover it is:

“An easy-to-understand, easy-to-use primer that helps to take the mystery out of mutual funds, stocks, diversification, risk/return, liquidity, and tracking performance.”

I’d say that pretty much sums it up. If you are already familiar with the basics, this won’t be of much interest. It would probably be great for the beginning investor or a teenager interested in the markets. Either way, it’s free from Fidelity, just click here and fill out the form. No purchase or account with Fidelity required. Give it as a gift? I’m not sure when I filled it out so I can’t say how fast it comes, but it does come.

It only took me two days to read Rich Dad, Poor Dad by Robert Kiyosaki & Sharon Lechter, as it is relatively short and an easy read. And Kiyosaki likes to say things over and over… and over. This supposedly non-fiction book deals with the conflicting teachings of his “Poor Dad”, his real educated paycheck-to-paycheck father, and his “Rich Dad”, a middle-school drop-out who is a millionaire. There are two basic themes that I got out of the book, after wading through the hokey stories:

1) People need to learn “financial literacy” more than book learning taught at school. I can agree that money matters are not taught in school nearly enough, but I’m certainly glad I went to ninth grade.

2) You should buy assets, not liabilities. Assets, such as real estate (especially real estate), stocks, and bonds, make you money. Liabilities, such as your house, car, gadgets, take away your money. This is probably the one thing to get out of this book, perhaps minus the real estate focus.

He includes very many vague stories about buying real estate properties for cheap with little or no money down and flipping them for great profits. Or investing in start-ups with great results. Many of these stories have been investigated with little proof found to support them. Overall, I see the book is more of an inspirational book on entrepreneurialism (is that a word?). Basically, try to think outside the box, and invest your money in something that grow instead of letting it sit in a bank account or spending it on that nice car. He just makes it sound way too easy to become a millionaire, just like any infomercial you see at 2am in the morning. Also, the book plugs expensive ‘get-rich’ seminars and his Cashflow game way too much.

Still, if the book gets your off your ass and thinking about making yourself some money, it’ll be worth the ten bucks and two days of reading during football commercials.

It took me a bit longer than I thought, but I finally wrapped up Common Sense on Mutual Funds by John C. Bogle. Overall, I liked the book, but not as much as some of the others I have read. The first three Parts have to do with Investment Strategy, Choices, and Performance. Basically, costs are most important, you can’t beat the market on average, and Indexing is best. This part of the book was so-so, it wasn’t superbly organized. I felt like The Four Pillar of Investing did a much better job presenting Indexing as the best approach to long-term investing, with A Random Walk Down Wall Street a close second and a better overall primer.
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I just finished up A Random Walk Down Wall Street by Burton G. Malkiel. This book became famous in 1973 for suggesting that a bunch of monkeys throwing darts at the Wall Street Journal could beat out most professional managers. And that theme, supported by a lot of statistics spit out by a lot of grad students, endures today. As the Amazon editorial review puts it succintly:

Malkiel advises investors to “buy and hold” a diversified portfolio heavy on index funds that passively mirror the market, which usually out-perform actively managed funds.

It also contains history about the stock market, and a straightforward discussion of common terms like “P/E” and “Beta” and “EMA”. Overall, I found the book very enjoyable and an easy read, and I can see how transaction costs in actively managed funds eat into the final return. Low expenses are key. The final part is what “diversified” means, as in asset allocation. The book does give the following suggestion for people in their mid-20s:

65% Stocks / 20% Bonds / 10% Real Estate / 5% Cash

This book is a great primer on investing overall and also gives some useful pointers on bulding your own portfolio.