Smartest Investment Book Youll Ever Read Canadian Edition: The Simple… (edició 2007)

If you're not familiar with "The Smartest [...] Book You'll Ever Read" series, they're short books -- with incredibly short chapters -- that make a lot of basic assumptions about how to deal with major financial life issues. They generally have a lot of good information in them, but readers should know that one plan doesn't always fit everyone.

In this investment book, index funds are the answer. Index funds make a lot of sense for a lot of people, but they're boring -- doesn't everyone want to beat the market and make loads of money? Very methodically (and repetitively), author Daniel Solin argues that you'd have better luck winning the lottery than in picking stock winners over a long period of time. Instead, he states you should have a mix of stock and bond indexes, and even makes a few exact suggestions for those who want to invest with Vanguard, Fidelity, or T Rowe Price.

While most of the advice is valid (I'm an index fund guy, too), sometimes the writing comes off as a little condescending. For example, he introduces "standard deviation": "I look at standard deviation in investing the way I look at the results of my blood tests. I don't really need to understand how the lab arrived at the numbers, but I do need to know what is within normal range." (Although standard deviation is then discussed in another chapter, it is never defined well.) That's fine for absolute beginners, but it really doesn't give them a solid foundation from which to ask harder questions. Another area the book is generally silent on is taxable versus pre-tax -- traditional IRAs and 401(k)s -- investment strategies. (The book generally assumes one is investing in a 401(k).)

If you're an absolute beginner -- or someone in financial disarray with at least a decade before retirement -- this book offers some valuable tips. But even if you have minimal investing experience, you probably won't find much you don't already know.

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LT Haiku:

No need to learn charts
or financial wizardry:
Buy some index funds! ( )

Safe to skip if you have heard the gospel according to Bogle and also have heard of asset allocation (if you haven't, go read about it, of course.) ( )

I picked this up because I was looking for a book that would break down exactly how brokers like Etrade or Schwab or any brokerage house makes money. This book clearly explained that and more. Very understandable and a good education for the reader on the finance industry. I recommend this book for anyone wondering about the best way to invest retirement money whether it be $5,000 or $500,000. ( )