As a financial advisor, a common question I get from friends and family is “Can you recommend a book that will help me understand how to invest?”
I always hesitate with this question, not because I do not know what to suggest, but because there are too many good choices! For some folks, the clear answer is the weighty and very thorough “A Random Walk Down Wall Street,” written by Princeton Professor and Rebalance Investment Committee member Dr. Burt Malkiel.
A classic of the genre, Malkiel’s book has sold millions of copies and continues to be taught at universities and in graduate schools worldwide.
Not everyone, of course, is quite ready to tackle the heft of that kind of assignment. That is why Burt and his colleague, Charley Ellis, another Rebalance founding shareholder and Investment Committee member, joined together in 2009 to compose a shorter, simplified investment primer called The Elements of Investing.
I think both books are excellent, and I often recommend them to friends, family and clients.
That is why last fall, I was excited to learn that Charley had written a book in harmony with “Elements of Investing.” On February 11, Charley published this book (his 21st!) along similar lines, titled Rethinking Investing. Like “Elements,” it is short (about 100 pages), it is written for the everyday investor, and it provides a practical solution for long-term investing success.
As Malkiel writes in the foreword, “In these brief pages, you will learn all you need to know about investing wisely and setting yourself on the road to a secure financial future. Here you will learn not only what to do, but also how to avoid the common errors that can ruin any financial plan.”
I love this kind of book. It solves a problem plaguing many who try to invest their money for the long run: information overload.
You do not need to pick winning stocks, Charley explains. You do not need to try to beat the stock market. What matters is thinking and behaving like a long-term investor: saving, investing regularly, and watching out for fees and taxes that rob you of the awesome power of compounding. Charley also includes an enlightening chapter on behavioral economics, how our emotions can derail our best intentions around money. It is a fascinating topic.
For those already convinced of these timeless truths, Charley adds the other half of the playbook: what to do once you reach retirement age.
That for me is the real payoff of reading “Rethinking Investing.” Too many people get to 60 or so and find that their confidence is shaken by the prospect of leaving behind a career and a steady income.
A paralysis sets in, and it is unnecessary. A few essential rules of thumb can make the transition to retirement easy and relatively pain-free: recognizing the investment roles of Social Security and your home in your “total portfolio,” adopting sensible spending parameters, and picking a reasonable retirement date.
Anyone at any age, from 16 on up to 76 or older, would benefit from owning a copy of “Rethinking Investing.” Charley’s decades of investing experience truly inform every page. I think that you will find his message charmingly direct and reassuring, much like sitting alongside the charming man himself.
I wish everyone had the access that I have to Charley Ellis and Burt Malkiel thanks to my work at Rebalance. But you do have the very next best thing in “Rethinking Investing” and, of course, through the portfolios they oversee for our friends and family, the clients of Rebalance.
Published by Wiley, Rethinking Investing is available now for purchase on Amazon.
Happy Reading!
