The Investment Scientist

The Investment Fiduciary’s Top Ten Reading List – June

Posted on: July 5, 2013

teenreader1. Chuck Jaffe of MarketWatch’s, “No Such Thing as Risk Free Investments” informs us that instead of looking for risk free returns, investors should know the risks. To that end, you may want to read “Taking Investment Risks”, which summarizes nine types of investment risks and classifies them into good, bad and ugly. You may also like to read “Managing Investment Risks” which shows you how to “take the good risks, control the bad risks, and avoid the ugly risks.”

2. I read this news, “Investment Banks Eye Hedge Funds for the Masses” with alarm. It is not surprising though after the JOBS Act relaxed hedge fund (marketing) rules, bankers and hedge fund managers can’t wait to go after the average Joe’s pocket. Before you handover your money though, heed David Swensen’s warning, and read “Why You Should Avoid Hedge Funds.”

3. Reuters reported, “FINRA to Warn Investors About Alternative Securities.” FINRA chairman Richard Ketchum mentioned one area of potential concern: investment vehicles that invest in shares of various hedge funds. Echoing his concern, I wrote “Why Allowing Hedge Funds to Market Directly to the Public is Such a Good Idea.” This, of course, is sarcastic.

4. This piece, in the NY Times, is a real eye-opener: “For Retirees, a Million Dollar Illusion.” The central premise is that, due to inflation and rising healthcare costs, one million dollars is not enough for retirement anymore. It’s true! For my affluent clients, I usually set a three million dollar target.

5. This is an interesting piece in InvestmentNews: “Medical Pros on Front Line in Fight Against Financial Abuse of Seniors.” 59% of doctors and nurses think cognitive impairment makes seniors vulnerable to financial exploitation.

6. Bill Gates wrote on LinkedIn: “Three Things I’ve Learned from Warren Buffet.” The is a must read for everyone, investor or not.

7. When Jack Bogle speaks, pay attention! He said that the retirement system is heading for three train wrecks. That’s why you may need to eat cat food in retirement, as the Amateur Allocator suggested. On the other hand, the index revolution, started by Bogle, is thriving according to Dan Solin.

8. It’s hilarious to read about how terribly wrong investment gurus can be. The most hilarious is of course the loudest one, for whom Allan Roth wrote “A Statistical Look at Jim Cramer’s Skill Level.” I have a piece on Jim Cramer’s top ten predictions of 2008.

9. Larry Swedroe wrote about why you shouldn’t trust your instincts when investing. Very simple, your instincts always lead you down the wrong path, as far as investment goes. Along the same vine, Jason Zweig wrote about his mission of “saving investors from themselves.”

10. Roger Wohlner wrote, “Is a Good Company a Good Stock?” Often times it is not.

Get my white paper: The Informed Investor: 5 Key Concepts for Financial Success.

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC. He is also a regular contributor to Morningstar Advisor and Physicians Practice. To explore a long-term wealth advisory relationship, schedule a discovery meeting (phone call) with him.



You may also get his monthly newsletter, or join his Facebook page for regular wealth management insights. Michael's email is info[at]mzcap.com.

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