The Disciplined Investor: Essential Strategies for Success

12/02/2008 11:24 am EST

Focus: STOCKS

Andrew Horowitz

President & Founder, Horowitz & Company

Just in time for the holidays, beginning investors would not be amiss to ask that their Christmas stocking be stuffed with this primer by investment advisor Horowitz.

This book includes the foundations of any solid investment plan, headlined by—as the title says—a disciplined strategy. As Horowitz surmises, during this time of reduced spending by retiring baby boomers, an infinite-seeming housing slump, and saturation of previous high-flying technology products, the investor would be best-served with a back-to-basics approach to a simple, but evolving investment process.

Horowitz’ advice includes something that every investor should know, but many don’t practice, and that is committing your goals to paper in order to identify just what type of investor you are. From there, you will then need to focus on the fundamentals of learning how to invest, which includes a very detailed section on stock selection, including how to work with screening tools available on the Internet.

Rounding out the basics, Horowitz discusses the importance of planning for taxes, diversification, and the benefits of systematic investing.

But the meat of the book is his take on the ‘removing emotion from investing’ bogey that plagues all investors—novice and experienced. Horowitz focuses on a three-pronged approach: Quantitative, technical, and fundamental analysis. And he does a decent job of explaining the basics of each. In this section, he also gets to the heart of his strategy for investment success and risk management: utilizing price targets and covered calls. These areas require a little more work and may be beyond the abilities and interest of the novice investor, but this is a good introduction to the concepts.

Horowitz follows those chapters with the pros and cons of mutual funds and annuities, instruments commonly used by financial planners to round out an investment strategy for appreciation and income.

And lastly, he shares some of his favorite sources, including Internet sites, available investment tools, and software programs.

In recent years, investors have seen some of the most and least prosperous market cycles. Right now, it seems like a return to the basics may be just what the doctor ordered. And novice investors—as well as those who mistakenly followed the previous doctrine of ‘hype’ investing, may want to peruse this book to bone up on the techniques that will lay the foundation for a solid investment plan.

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