Wise Investing Made Simple: Larry Swedroe's Tales to Enrich Your Future

I've read all of Larry Swedroe's books on investing. As a wealth manager my objective is help clients make smart decisions with their money. "Wise Investing Made Simple" has two great benefits. Larry explains otherwise complex investing principles in simple, understandable terms using stories and situations familiar to most people. This has helped me hone my own skills to simply explain the complex to my clients and prospects. Also, it's been a great book to give to clients and prospects to deepen their own understanding of correct investing principles. There's so much investment garbage in the world. This book is a great antidote. I just bought an entire case of these books.

Investing is a scary topic, which is why so many of us have given our investing power to so-called "pros" only to discover it is they who benefit most. But by the time you finish "Wise Investing Made Simple", you will be far less intimidated (if at all), may well know as much as some of the self-proclaimed experts, and feel secure enough to handle your own investing. At the very least, you'll avoid making some of the big mistakes that, ironically, many pros make. And if you choose to use a professional financial advisor, you'll know exactly how to select one that will safeguard your interest. While the title suggests a book for the novice, the information here applies to experienced investors too, because, as you will learn, there is often an inverse relationship between the supposed knowledge of the pros and the benefits they accrue for their clients, as 80% of supremely well-educated advisors fail in their stated objectives to "beat the market". Now, a good story is memorable. And a good investor is one who must remember certain basics to withstand the marketing noise that competes for our attention. But nobody til now has distilled the frightening and enigmatic investing field into such fundamental, memorable, and fun to read "tales". This takes a mastery of the evidence and a voice that puts the reader at ease. Swedroe's selection of stories--ranging from sports analogies to classic mythology, dialogues, idioms and parables--allow just about anyone to "buy-in" and relate to the workings and principles that underlie the seemingly complex investing morass. And he posits real situations for the characters (male and female) in his dialogues, which will resonate with many. I could select any chapter as typical of how Swedroe makes the complex accessible, but the early section where Swedroe describes how market prices are actually set (in essence, the bedrock of all that money) clears the muddle and sets the tone for all subsequent stories. Each of his tales has a moral which, collectively, sum up "Wise Investing Made Simple" in just a few hundred words. But it is the stories themselves that make you memorize their morals. Swedroe's writing style is clear and devoid of the linguistic clutter that obfuscates many books and articles that similarly claim to make this intimidating subject "easy". The work is simple without being insulting. Finally, and most importantly, Swedroe's writing is based on evidence--peer-reviewed studies, not his own opinions. This particularly comforted me, and it should comfort you. Too often is it that a smooth-talking writer (let alone some excitable speaker on CNBC) can just tell the public what to do, absent supporting data. The point is that just because an authority passionately and even compellingly proclaims something, does not necessarily make it so. Swedroe's writing, both here and in his other work, is based on texts--references--that can be checked. I know. I checked them. In sum,

I've been reading Larry Swedroe's work for years, and I find his new book to be among my favorites (along with THE ONLY GUIDE TO A WINNING INVESTMENT STRATEGY YOU'LL EVER NEED). You'd think by now, he'd have said it all, but this current book says it in a way that is particularly readable since it's based on anecdotes, stories and a glimpse into Larry's personal interests. What repetition there is reinforces how timeless the wisdom is -- through all kinds of markets and for all kinds of investors. I find it comforting to know that the right answers yesterday remain the right answers today, and will likely still be the right answers tomorrow. How simple can it get?

Larry Swedroe's Wise Investing Made Simple uses short chapters and pithy stories to help readers rethink their basic premises and deeply held beliefs on how to be successful investors. The author asserts that most investors, without realizing it, do not know how markets work. Many investors are misled by conventional wisdom, economic forecasts, Wall Street recommendations, and CNBC gurus. They mistakenly believe that smart people, working diligently, can discover which stocks are undervalued and should be bought, and which stocks are overvalued and should be avoided. They also believe that smart people can get in and out of the stock market at the right time. These mistaken beliefs lead to the search for a strategy that will "beat the market," a search that is doomed to fail. Swedroe sets out to change the reader's understanding of how markets really work and to provide the reader "with sufficient knowledge to begin to make more informed and more prudent investment decisions." Along the way he debunks many investment fables, including: "Great companies make great investments," "Buy what you know," "Stocks are not risky in the long run," and "Past performance is a predictor of future performance." . Wise Investing uses inventive stories in a clear, understandable and concise manner to illustrate why economic forecasts are not useful, why trying to time the market or find undervalued stocks is a loser's strategy, and why finding the next investment superstar is nearly impossible. He illustrates why overconfidence can be dangerous and how investors confuse information with exploitable knowledge. Swedroe uses analogies from such sports as baseball, basketball, golf, and football. He also uses game theory, horse racing, and insurance examples. Without straining, he refers to astronomy, astrology, alchemy, and mythology to keep the reader interested. Finally he peppers his stories with specific historical examples, which are very convincing. Each story makes a point, and the cumulative effect is impressive. Some of the very practical suggestions include how to interview and evaluate a stockbroker and how to evaluate an investment strategy, both before and after it is implemented. If you already know something about investing, this will still be a useful book, because of the cumulative logic of the chapters, the engaging writing style and the memorable stories. Wise Investing will be useful to financial advisors in explaining to clients how to avoid the common pitfalls. Wise Investing is primarily a "why-to" rather than a "how-to", in that to implement the strategy correctly you may want to read his earlier book - The Only Guide to a Winning Investment Strategy You'll Ever Need - or you may need an advisor. His last chapter covers why some people should consider using an advisor and how to find one you can trust. (Full disclosure - I am a fee-only financial advisor.) Wise Investing is a valuable addition to anyone's librar