Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies
Stocks for the Long Run set a precedent as the most complete and irrefutable case for stock market investment ever written. Now, this bible for long-term investing continues its tradition with a fourth edition featuring updated, revised, and new material that will keep you competitive in the global market and up-to-date on the latest index instruments. Wharton School professor Jeremy Siegel provides a potent mix of new evidence, research, and analysis support… More >>
Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies
Posted in Business and Investing | 
Tags: Definitive, Edition, Financial, Guide, Investment, Long, Market, Returns, Stocks, Strategies, Term
This is much improved from the first and second editions. (I didn’t read the third edition and may not have read all of the second.) The book contains a lot of useful information, presented, for the most part, clearly, and Siegel’s commentary on the factual material he has compiled incorporates up to date research. The book can be read as a (slightly to moderately advanced) investment guide rather than just a compendium of reasons to chose stocks over other investments (or at least over fixed income investments). To his credit, Siegel has learned a lot about investing since the first edition.
Although this point is not made in the book, market indexes definitely can be beaten through the careful selection of actively managed mutual funds — requiring only (first) reading a broad selection of books on investing, subscribing to and reading Morningstar, and reading fund prospectuses and reports. (This may seem like a lot of work, but most of the time is spent upfront and at your own pace; and considering how long your money will be invested, the lifetime effort is minimal. A corollary to this approach is that a nonprofessional investor should never buy individual stocks. This not only will take more time than most people can afford, but for almost everyone will result in at best (assuming infrequent trading) the market return with a lot more risk.) Those, including many prominent economists, who believe it is impossible to identify funds that will outperform the market in the future are just wrong. Past performance can predict future success in investing as in most other endeavors. Admittedly, there is a theoretical basis — the efficient markets hypothesis — for contending that stock market investing is qualitatively different from, say, chess playing, but ascribing the results of the many long-term successful investors to luck or excess (and lucky) risk taking seems to me more an act of faith than reason. Finally, the beauty of investing through open-ended mutual funds is that unlike stocks, which generally are priced efficiently, a fund’s price is not affected by its demand. Thus, you can buy the best at the same price as the worst — i.e., the current market value of the stocks the fund owns. (It is true that as the better performing funds accumulate more assets their ability to execute their strategies can be affected, but responsible funds attempt to mitigate this situation by closing, sometimes even to current investors.)
Rating: 5 / 5
If you have no training in finance, this book is a good starting point. Don’t expect to trade like a pro after reading this, though. It provides a perspective, an interesting big picture. The historical accounts are worth exploring. The tables are the information you want to take with you. Too many institutional details for my tastes, but it is probably fine for an introductory book.
Rating: 4 / 5
Siegel’s masterpiece is a must buy for anyone who wants to stop wasting money on mutual fund fees and start accumulating wealth. I give this book and Professor Siegel an A+.
Andrew Nissenbaum
Rating: 5 / 5
Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns And Long Term Investment Strategies
everything was well explained and quite easy to understand.
Rating: 5 / 5
The author of this book argues that stocks are the best investment vehicles for the long-term. He supports his point by providing a graph that shows the performance of different investment vehicles from 1801 to 2006. The vehicles being compared are stocks, bonds, bills, gold, and the dollar. One dollar invested in stocks in 1801 would grow to $755,163 by 2006. This is significantly more than $1,083 for bonds, $301 for bills, $1.95 for gold, and $0.06 for the dollar.
While this study proves that stocks outperform all other investment alternatives, readers should notice that stocks performed well even though the dollar lost more than 90%. Why is this important? Have you ever heard the media trying to make us believe that weak dollar is bad for stocks? This study shows how the media is completely wrong.
Besides agreeing with the author about stocks’ superiority, I do not agree with his beliefs about the Capital Asset Pricing Model (CAPM) which states that in order to increase returns, investors have to take on more risk. This philosophy is taught in business schools around the country, and it is no surprise that the author writes about it – he is a professor. Even though I do not agree with him, he did a good job explaining the theory.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
Rating: 4 / 5
This is acceptable in terms of google. Nothing appears to bother upon it compared to that!Ironically, this is just was talked about ten years prior at the last internet about search engines in 1994.