Guide to Investment Strategy: How to Understand Markets, Risk, Rewards, and Behavior

Despite the fact that I have an experience of over 20 years I found this book interesting. I would make language a bit easier, otherwise it is perfect

i bought this among a half dozen or so investment guides as schooling for choosing new portfolio advisors. the advice here is well informed by industry contacts and professional experience and illustrated by incisive graphs. the benefit here is the bracingly conservative perspective: cash (or the market equivalent, such as t bills) is the benchmark investor standard, and forays into anything other than cash need to be evaluated with a sober eye to the downside risks, as the past two bull/bear cycles have schooled us all. investments in bonds or equities or exotics need to fit both the investor psychology (nervous or serene) and portfolio time horizons (which defines the investor's "natural habitat"); this is a process constrained by substantial uncertainties, and by risks that the capital asset pricing model underestimates. my complaint is that the insights pass by rather quickly in a discursive, passive voice presentation (also my complaint with the economist magazine/newspaper, publisher of this book): one must read some sections twice to glean the message. the tone is also interpretive rather than descriptive, so the discussion can plunge into specific technical issues (such as "good and bad beta") without laying out, for example, what beta is, how it is used, and how it has fared as a metric of investment risk. but the value of this book is to have the full range of investment opportunites, from cash to hedge funds, cdo's, currencies and real estate, laid out as a synoptic and judicious narrative for informed readers and, especially, readers who have bit once bit by market volatility or day trading the chinese market.

The main thrust of this book is that disastrous outcomes are far more likely than people would like to think, esp if they feel they "know" a certain market. it spends a lot of time justifying the need for diversification and how people respond to risk and adverse outcomes (behavioral economics). definitely directed at the deep pocketed and (would-be?) financial managers who invest large sums of money (for themselves or others). it does not give you a strategy to follow (any good book CANNOT). it also tries to show both sides: it says equities can have more risk than people imagine and also says that given past performance long term investors may be bullish on equities (esp when compared with "safe haven" treasuries). it suggests that the investors value their appetite for risk and reward and invest accordingly. though it frequently resorts to tables and graphs, it is not super technical but does try to cover a lot of jargon and work by current economic research.

I found the book extremely useful with some great ideas for investment portfolios. Need for diversification, understanding risk and suitable investment. Its a great book for someone who devotes time regularly to manage their own investment

Peter has done an excellent job taking some complicated ideas and adding common sense to them. Financial Advisors and clients should use this book as one of the guidelines to increase,protect, and enjoy wealth.