Interesting Book

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I have just read The Smartest Investment Book You’ll Ever Read by Daniel Solin. In this book he highlights the case against active investment in the sharemarket and instead advocates investing in passive index funds.

He makes a lot of very interesting points – especially how many active fund managers fail to beat the market and deliver poor returns for their clients.

It reminds me of an article I read many years ago about an Australian fund manager known as Mr. $54 billion – because that was the size of his fund. After he retired he said that for all the work and effort and analysis his fund did it was not worth it. His fund managed to outperform the market by only 0.5%.

The books also has many interesting quotes from Nobel Prize winning economists and other qualified investment professionals, but the one I liked best is from Warren Buffett in his 1996 Shareholder Letter:

Most investors, both individual and institutional, will find the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals.

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One Response to “Interesting Book”

  1. Craig Says:

    Actually, this is quite correct, and i agree with it, it is quite hard to out perform the market itself consistently over the long run – short term gain is easy, but consolidating and extending profits for significantly longer and longer periods increase the chances of market corrections against you.

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