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A good book, very clear, but with some serious omissions,and the pensions section is now out of date
on 24 April 2016
This is a beginners book on investing, which explains in clear language the nature of, and how to go about investing in, a range of assets including bonds, gilts, shares, investment trusts, ETFs, OIECs and unit trusts. He describes the tax advantages of pensions and ISAs, and the tax implications of assets held outside of a wrapper. The recent changes to pensions mean that the pensions section is out of date, and the reader should head over to the HMRC website to get the latest information. Overall this is a very good book, well written and useful, but with serious omissions.
A serious criticism is that there is no mention of buy to let, or one's own home. One's own home is an excellent investment vehicle given that gains are free from tax. In addition the home owner can currently rent out a room, and make up to £7,000 tax free, a fact that is not even mentioned in passing. For a young person with no family comiitments, or an elderly person struggling to live on a pension, this could provide an important income stream.More seriously, Bell does not mention buy to let, which is argulably far more lucrative than investing in stock markets, thanks to the geared nature of the investment, and the tenant paying off most if not all of the mortgage.
Another criticism is that he fails to mention investing in objects such as art, classic cars, fine wine and antiques. These are perhaps not for the average investor, as they require specialist knowledge, but given that they have utility value - a classic car can be driven in fine weather, and antique furniture can be used as furniture (doh!) - this class of investments deserves to be mentioned at least in passing.
The cynic might wonder if these omissions are because these investments are not covered by Bell's company, AJ Bell You Invest.
A more minor criticism is that he does not take much time to explain the historical performance of stock markets. For example, many people lost a lot of money in the Japanese market, which has seen several false dawns over the preceding decades. In contrast investors in the UK markets have seen positive gains over the long term. In his defence he warns people to do their own research, and there is a limit to how much can be included in the book. Still, I do think a few pages on this would not have gone amiss.