RECOMMENDED BOOKS
Scroll down to read my summary and top three takeaways.
A Random Walk Down Wall Street
Mastering the Market Cycle
The Psychology of Money
The Little Book of Common Sense Investing
The Bogleheads Guide to Investing
The Bogleheads Guide to Retirement Planning
The New Retirementality
A Random Walk Down Wall Street
Read it if:
You want a comprehensive, data-heavy history and analysis of investing vehicles, theory, and performance.
Tip:
Be sure to buy the latest edition. The original version is over 20 years old with many subsequent updates.
Top three takeaways:
There is no methodology that can predict the future of financial (or any) markets.
A portfolio using Modern Portfolio Theory (MPT) (particularly an 83%/17% US/International index) provides optimal risk-adjusted returns.
Judgment bias is strong: people attribute skill to luck and luck to misfortune. They own the good, but not the bad.
Mastering the Market Cycle
Read it if:
You want to understand the hows and whys of market cycles to avoid buying at the top and selling at the bottom.
Top three takeaways:
Read the entire book; it’s a treasure trove of wisdom.
Sign up for Howard Mark’s Oaktree Insights newsletter for periodic, pertinent market analysis.
Surface-level summary of the book’s overall ideas:
“A winning investment philosophy can be created only through the combination of a number of elements: a technical education; a view on how markets work; be a lifelong reader; exchange ideas with other investors; there is no substitute for experience.”
The Psychology of Money
Read it if:
You want to understand the power and pitfalls of your psychology to make better investment decisions.
Top three takeaways:
You will change - adapt and release plans and ideas that no longer serve you.
The future will be a surprise; things that have never happened before happen all the time.
Risk is what is left over when you think you’ve thought of everything.
The Little Book of Common Sense Investing
Read it if:
You want to read just one book.
Top three takeaways:
A money manager’s chief value to their clients is in shielding them from costly mistakes.
All things revert to the mean.
The worst enemy of a good plan is the dream of a perfect plan.
The Bogleheads Guide to Investing
Read it if:
You want the least reading for the highest value. You could literally just read the cover and get most of the value.
Top three takeaways:
Keep it simple.
Keep costs low.
Stay the course.
The Bogleheads Guide to Retirement Planning
Read it if:
You want a solid overview of getting from your working life to your retired life.
Top three takeaways:
Investment Policy Statement: critical to have and review annually.
Ensure advisor fees are in alignment with your interests as an investor.
For estate planning, use a professional in your state of residence.
The New Retirementality
Read it if:
You are hesitant to retire for psychological reasons. Otherwise it’s just meh.
Top three takeaways:
Think about your life-long vocation vs vacation.
Purpose is essential to satisfaction.
Use your own life expectancy number for planning.
DON’T WASTE YOUR TIME
Practicing Financial Planning
Practicing Financial Planning
Why I didn’t like it:
Very expensive and little in-depth or meaningful information - especially for such a large and costly book. Makes me wonder about the value of the CFP designation.