Trading is not a game of exacts. Perfectionists need not apply. Markets are made up of many irration...
2007—Investing Books A-Z
01/01/2008 12:00 am EST
It’s been a great year for investment books! In 2007, the books I reviewed covered a wide range of investment topics, including equities, income, the fundamentals of investing, mutual and index funds, commodities and key investment strategies.
And since many investors begin to review their portfolios and investment strategies as each year ends and a new one begins, we wanted to bring a few of our reviews to your attention again—just in case you need a little extra help.
Bryan Perry’s The 25% Cash Machine, showed investors how to turn dividend-paying, appreciating equities into double-digit payouts. This step-by-step guide helps investors uncover widely-available, highly-diversified, strategically-flexible, and very liquid securities that pay huge yields.
These are investments for the long-term and include Canadian royalty trusts, closed-end funds, real estate investment trusts, and master limited partnerships.
If income is more to your liking, Income Investing Today: Safety and High Income Through Diversification, by Richard Lehmann, may fill the bill. Mr. Lehmann tells us the benefits of income investing are many, including diversification and ease of selection.
And he expertly corrects the mistaken notion that income investing means investing in ‘fixed-income’, or only bonds, and instead, spends a good portion of the book on non-traditional income instruments including preferreds, hybrids, and convertibles. Additionally, like Mr. Perry, Mr. Lehmann spends considerable time explaining investments that combine equity with income, such as Canadian energy and royalty trusts and real estate investment trusts.
With the commodity super-cycle upon us, many investors have decided to dip their toes into the world of gold, soybeans, pork bellies, oil and other commodities. And fortunately, they found tremendous help in George A. Fontanills’ Getting Started in Commodities. This comprehensive manual provides detailed coverage of each element of the commodity marketplace, including an in-depth explanation of each tradable commodity, as well as an introduction to the exchanges on which they are traded.
Mr. Fontanills discusses all the elements a trader needs to begin, including types of orders, margins, contract size, and pricing, as well as the factors that affect commodity prices, including economic, market, weather, cyclical, and seasonal events.
He also explains both technical and fundamental parameters and several trading strategies. And for investors not yet ready and willing to stock up on pork bellies, options, or futures, Mr. Fontanills offers alternative investing strategies including exchange-traded funds, mutual funds, exchange-traded notes, HOLDRs, and common stocks.
Now, some investors just don’t have the time to dedicate to following individual stocks, buying fixed income investments, or learning about commodities. And for those folks, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle may just be what you need.
Mr. Bogle is the founder of Vanguard Mutual Fund Group and the creator of the world’s first index mutual fund. And his book explains the reasoning behind his creation, including the high fees that investors pay for traditional investments, the lackluster returns they often receive from their own attempts at stock-picking, as well as those less-than-stellar results from so-called ‘money managers’, and lastly, the inherent conflict of interest between the managers’ goals and that of their clients.
His solution—the index mutual fund—is a method of owning all of the nation’s publicly-held businesses at a very low cost. Investors can capture almost the entire returns of a company by participating in its dividend and earnings growth via well-diversified funds that aim to track the broad stock markets. The second part of the equation to success, says Mr. Bogle, is holding the funds for the long-term, allowing the magic of compounding to do its work.
However, as Mr. Bogle says, not all index funds are created equal. Therefore, he closes his book with a list of do’s and don’ts designed to maximize your profits and reduce your costs.
Even after so many years in the investing arena, it’s always a treat to open my mailbox and find a newly-published book from one of my colleagues. I always glean some useful tidbit of information from them, and I look forward to bringing many more to your attention in the coming year.
Best wishes for a happy and healthy New Year!
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