Why Smart Investors Fail and How to Tilt the Odds in Your Favor
May 9, 2016
Jakab, editor of the Wall Street Journal’s “Heard on the Street” column, is concerned about the money being left on the table by blithely ignorant amateur investors; he wrote this book, according to the preface, to help civilians understand what’s happening to their money, and how to fix the situation. In almost no other area of life are people expected to manage something so important with so little information. “With gold watches and a steady, livable pension check becoming a rarity,” Jakab writes, “we’ve been entrusted with our own finances and for the most part failed miserably.” And professionals may not do much better. The “composite fund investor” earned an annualized 2.5% during the 30 years of a study by fund evaluation firm Dalbar—a terrible showing. Jakab’s efforts to acquaint readers with the basic realities of the market and to provide an insider’s view of how to approach money management will be comprehensible to even the most intimidated reader. Energetic and engaging, this is required reading for anyone who’d like to retire ahead of the game.
June 1, 2016
As the title suggests, Jakab, a writer and editor for the Wall Street Journal's "Heard on the Street" column and a former stock analyst at Credit Suisse, takes a dim view of Wall Street fund managers. He repeatedly bemoans the ways in which "savers are parted from their money" by professionals playing a zero-sum game with the funds of regular folks on the losing end, including retirees, young workers, and families. The book focuses more on what investors shouldn't do--such as listening to hot, get-rich advice--and shows how the volume, confidence, and self-assuredness of media pundits is often inversely related to their accuracy rate. Jakab is no anticapitalist, though. He believes in making money--he just recommends doing it with an investment strategy he describes as "less is more" and "cheap and lazy." "Throughout this book," writes the author, "I've encouraged you to pay as little as possible and do as little as possible to make sure your nest egg grows." His prime strategy is to choose low-cost index funds and then mostly look away. VERDICT With a knack for telling a story with humor and detail, Jakab presents a book that will appeal to thrifty fans of index investing and some supporters of Bernie Sanders.--Doug Diesenhaus, Univ. of North Carolina, Chapel Hill
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