Wise Investing Made Simpler: Larry Swedroe's Tales to Enrich Your Future (Second in a series)

by Larry E. Swedroe

Since Larry Swedroe's first Wise Investing book was published in 2007, investors have watched the world change dramatically. The 2008 financial crisis introduced investors to a mess of questionable investment products and dishonest financial institutions. Thanks to Wall Street and the financial media, investing appears neither simple nor easy. Fortunately, the Wise Investing Made Simple series focuses on simplifying prudent investing concepts. It's a lifeline in a chaotic sea of noise and confusion. The first book in this series entertained and educated investors by teaching them about the markets through storytelling. This second book furthers this aim by delving deeper into important investing principles without sacrificing simplicity, tackling issues such as retirement planning, long-term investing, and owning property. New and experienced investors alike will benefit from the wisdom and sense of calm that Larry Swedroe shares in these pages.

Genres: Finance, Economics, Money, Nonfiction

213 pages, Hardcover

First published September 1, 2007

Reviews

[Chazzle]

This book provides extremely persuasive fables, logic, and evidence that the passive method of stock investing (i.e., buy and hold index funds) is the wisest path. Cited references were credible.

Some highlights:
1) In a study of six NBA seasons, actual point differences of final scores were within a quarter point of Vegas point spreads. And that's just an amateur market.

2) His chapter on confusing after-the-fact outcome with before-the-fact strategy is a classic. (Just because your house didn't burn down, it's still smart to have homeowner's insurance.)

3) His thought experiments are interesting. In one of these, he says, let's say you're the 11th best golfer in the world, competing against the top 10 golfers in the world. To give you a fighting chance, the other 10 go first on a par 4 hole, and report their scores. 8 get bogies and 2 get birdies. You now have a choice to accept par without playing, or to play the hole. What would your choice be? (I think the corresponding lesson in investing is fairly predictable, but the analogy is very persuasive.)

In short, the book is good. Unfortunately, I do have some quibbles. The editing is a little sloppy. The author mentions some of his other titles several times within the text. And finally, maybe because I've read too many books like this, I felt the author belabored some of his points; for example, in the golf analogy above, the full explanation took about four pages, even though I understood his meaning with no explanation.

Still, I think I can honestly say that this book is much more persuasive than Malkiel's A Random Walk Down Wall Street and somewhat more persuasive than Jack Bogle's books. So, within this genre, it's a four star book.

[Joel Roberts]

an indirect endorsement of passive investing via a biting critique of active investing. he makes good points. i agree with him that the bulk of equity wealth should be invested "passively"; however, i think he fails to address asset allocation (and reallocation) adequately... and this is an important oversight. on "market timing", i only partially agree with him. when the market is down, it makes sense to drop a few more dollars into the market... and that IS market timing (which, the author claims, you should never attempt to do). i like how the author organized the book into a series of topics, often using stories or pseudo-interviews.

[Cristian Paredes]

A great book to learn fundamental investment principles through everyday relatable stories. I recommend this book for anyone interested in learning about investing.