13 of 13 people found the following review helpful
on 14 September 2009
As an ex-banker, I never normally read investment books aimed at a general audience as I normally find them somewhat unrealistic in the impression of investing (speculating ?) that they give the reader. This book is different. I was looking for something new to read about personal pensions and came to it because of the quality of the reviews on Amazon and in the press. Essentially, the author lays out a methodology which encourages the reader to *really* think about a number of factors before they invest. For example: What are they investing for ? Time-frame ? Returns required or planned for ? Risk tolerance ? etc. Asset allocation is really focussed upon and the importance of minimising costs (or 'losing-the-fewest points') is continually hammered home. The aim is to help the investor develop an investment framework they have confidence in and then stick to it and be consistent, even when the portfolio is not doing well. This may not seem particularly original but there is a clarity and authority about the writing which really helps make the case. The author is also consistent in always attempting to look at as much historical data as is possible (typically 100 years) which makes a change from so many books which only seem to go back as far as the 1970s or 1980s. This long-term viewpoint also has the benefit of really showing how much volatility there can be in different markets and how over- and under-performance can last for many many years. (This in itself is quite sobering.) In short, this is an excellent book and I am recommending it to friends as an essential read on investing in general and for personal pensions.
17 of 18 people found the following review helpful
on 4 July 2006
A timely and very useful overview of practical recommendations, backed up by clear explanations and references to original research, on a wide range of personal investment and financial planning topics. The book should prove particularly valuable to UK investors who have only recently gained access to the competitively priced index and exchange traded funds which can form the basis of any investment portfolio. The book draws heavily on the writings of several US authors, notably Bernstein, Bogle, Ellis, and Swensen who have brought an understanding of the benefits of careful asset allocation, passive investment, and relentless focus on minimising taxes and transaction costs, to countless US investors. Based on personal experience as an insider in the fund management industry, the author does not pull his punches in describing the inadequacies of most retail investment products available in the UK market. In addition, his analysis of alternative investments including hedge funds brings an open-minded but healthy scepticism to bear on some current favourites. The only minor complaint is that the book stops short of recommending specific service providers or sample portfolios, although this is perhaps understandable given the rate at which new products are appearing in the market. Overall, a welcome addition to the bookshelf of any serious investor.
4 of 4 people found the following review helpful
on 18 April 2011
What I like about this book is that it is full of sense, and also it seems eminently honest.
What I mean is that the author doesn't seem to be selling the reader anything, and the investment strategy he recommends is clear and carefully argued for.
Also, this edition is written after the financial crash of 2008, which counts in its favour. Any investment decisions that you make should take into account the worst case scenario (e.g., another 2008 happening in twenty years)
His philosophy is simple, and the one I follow. Decide on your investment mix (bonds/equities) based on your age, your appetite for risk, and your long-term investment goals. E.g, for me, as a 30-yr old with a long, long time to retirement, I am putting 80% in equities and the rest in gilts. Once you've decided on your mix, buy the most efficient index trackers to implement this mix. The book recommends the best trackers for each index, and explains how to decide which are most efficient.
He argues against fund managers - basically, because picking them is a gamble and there are more losers than winners. If you're looking for managed funds then don't buy this book. Unless, of course, you're open-minded and are willing to consider the index-tracker approach to investing.
All in all, a great read. Well-argued, and with practical recommendations. It has fully convinced me and is the only book I've needed to plan for my retirement (without any need for an Independent Financial Advisor)
14 of 15 people found the following review helpful
on 28 March 2008
Tim Hale's book gives readers the knowledge and tools to make good investment decisions. That alone is a significant achievement given all the "How to get rich quick" books lining the average set of shelves in any book shop. But the clarity of thought and clear writing is what really makes this book stand out - and what has made me much more confident and relaxed about my investing.
The book first cuts through all the noise that we read in the Sunday papers relating to what sector is doing best this month, what fund manager is this week's star, and whether the Footsie is up or down. He convincingly shows how strategies based on market-timing, chasing the next sector or region, and constant tweaking (trading) of your investments is a sure way to lose money. Like a bell chiming through all this noise, Hale explains how good investing is much simpler when you do a few things extremely well.
Hale gives direct advice backed-up with well-presented data. Whether your investment horizon is 30 years or 5 years, he explains how to construct an optimal portfolio that maximises your chances of making money and see you through periods of market trauma.
The meat of the book is a master-class in sensible investing: a step-by-step guide to the basics, and the complexities, of personal investing. Plenty of detail is given in the form of sample portfolios and tables that help readers to create a robust portfolio. Going beyond simple statistics such as "the stock market returns on average 5% a year", Hale gives the tools to help you work out how much you may need to invest if you want to be (for example) 80% sure of a retirement on 70% of your salary. It might sound complex, but the book is so well constructed and written that readers are gently led through the fundamental decisions they need to make.
After reading the book, I felt much more relaxed and confident about my investments and what they might do for me. If you're half-way serious about investing, you could do much, much worse than reading this book. Thoroughly recommended.
13 of 14 people found the following review helpful
"Smarter Investing- simple decisions for better results " by Tim Hale is the clearest, best written introduction to intelligent investing published in 2006. Hale reiterates the simple truth that the individual investor cannot beat the market over the medium term, nor should they try.
If finance industry's advertising in the Sunday papers money sections paints an accurate picture of the industry then the City is full of manically active fund managers who with crystal ball like precision beat the markets year after year to bring stellar returns to those wise souls who have entrusted their money to them. Up to a certain point there is some truth in the adverts, in the short term a handful of actively managed funds will out perform the market. The problem lies in the fact that each year it is not the same funds nor the same managers who out perform, and more tellingly in the medium to long term it is the market which consistently outperforms most actively managed funds.
The fact that in the long term the market outperforms most of the finance industry is the foundation of Hale's investment strategy.
For Hale the challenge is how to build a simple, easily understood investment plan that tries to be the market, that is give the same return as the broad market indexs such as the FTSE All-Share Index with a counter weight in high quality bonds to try and off set any abrupt equity market fluctuations.
Management fees, set up fees and all the other costs that investors have to bear get a close grilling, one of the reasons actively managed funds fail to perform over time argues Hale is that the enhanced management fees and transaction fees eat at your money over the medium term. Index funds on the other hand have a buy and hold approach with fewer transactions and management there is much lower fees, so there is more of your money working for you.
What Hale concentrates on is explaining the building blocks of a balanced investment portfolio, how they should work together at different times of your investing life. He cuts through much of the hype surrounding investments and focuses in on the hard facts that should be front of mind for any investor-risk/return balance over the lifetime of the investment. Hale doesn't dismiss the role actively managed funds could play at the edges of an investment portfolio, however he argues that the foundation of a smart portfolio should be domestic equity index funds and high quality bonds.
To diversify the portfolio Hale once again suggest basic tools not flashy complicated investment vehicles, so to spread out the bond allocation he suggests using Hedge fund of funds and property, and if you are worried about inflation, inflation protected bonds. In the equity portion to spread the risk he suggests international equities (developed economies) and commodities. The headline grabbing small companies, emerging markets and value equities get little space, with a marginal 5% maximum for each if you feel lucky.
What makes Hale's book so persuasive is the fact that the author spent so much of his professional life working in active fund management companies, sort of poacher turned gamekeeper.
The book is well written, draws the reader step by step into quite complex arguments without resorting to jargon and technique short cuts. At the end of book both the novice and the hardened investment specialist will come away better informed and armed with the tools necessary to make your money work harder for your future.
If you only ever read one book on investing this should be the one.
33 of 36 people found the following review helpful
on 28 July 2006
I'm a fee based financial planner and I can tell you that Tim Hale's unique book is full of wisdom.
I like the way that he comprehensively exposes the "Dark Secret" which most stock brokers and fund managers hope you'll never discover. I regularly see new clients whose investment portfolios and retirement accounts have been drained of hundreds of thousands of pounds without adding any long term value.
The "Dark Secret" is that managers don't beat markets. Markets outperform most managers by substantial margins over long periods of time.
Buy this book and you'll see how you can capture those returns and avoid making another common error which I call "The Big Mistake".
PS All our clients now get a copy of this book to help them to understand what it is that we actually do for them.
6 of 6 people found the following review helpful
on 17 June 2006
As an ex banker it found this to be one of the first books that I've read that makes complex issues seem clear and straightforward. Why has it taken someone so long to write a "breakthrough" book? Awesome!
3 of 3 people found the following review helpful
on 30 October 2010
Smarter investing means getting in the market, and holding on. Avoid managed funds, market timing, stock picking, all the noise made by the financial services industry (which is after all best at servicing itself). But it's easy to say 'get in the market and hang on', what makes this a great book is that through analysis and argument, Tim Hale helps you to understand with sufficient depth, why this is the right strategy. You'll need this when your financial advisors are telling you otherwise, or when your shares suffer a dip in price. e.g. most passive funds outperform active managers. Picking a good active manager from past data is very hard (having a couple of good years does not tell you much). Anyhow, get it & read it if you have money that needs investing. Especially if you are inclined to stick your head in the sand - it's not that hard to make a few smart choices now that will most likely have a positive impact on your long term net worth.
14 of 15 people found the following review helpful
on 1 June 2006
At last - a book that helps me to feel less like a financial novice. When somebody takes the trouble to tackle subjects that most 'experts' over complicate and explains them in clear and simple English - they earn my undying gratitude. Thank you for a great contribution to the investment arena.
10 of 11 people found the following review helpful
on 24 February 2010
Within my library of books on investment, this one stands out, for two reasons. Firstly, it is without doubt the most useful book of its kind that I've encountered in many years of reading and writing on financial and investment issues. Secondly, because my copy has become somewhat dog-eared through hard use.
Tim has a unique ability to organise technical information into big-picture concepts, which he then drills down through in order to arrive at a cogent and effective investment planning process.
The end result is so logical, rational and easy to follow, that all the other books become useful insofar as they supply helpful supporting data or arguments.
I am an IFA of some 20 years standing, and have benefitted from plenty of technical training over that time. Little of that came even close to Tim's extremely thoughtful contribution.
So don't mess about - buy it!