on February 13, 2013
Index fund investing is certainly the way for us middle class, middle to older age people should be investing. After the scandal of the mutual funds over the last 25 years, it is really great to read books and guides on how to choose the best index funds. That is why I purchased this book. However, it was a little disappointing. It was good in the sense that it promoted index fund investing, but like so many weaker writers, he assumed his audience was pretty simple minded. In fact, most investors have become very sophisticated over the years and what we need is a guide which helps us to think through all the important factors to keep in mind when investing.
I realize the title says "Investing Made Simple" and I did keep that in mind when I was reading. Nevertheless, investing is never simple. I believe the average return for the average investor over the last 50 years has been around 2%. This is unacceptable given that indexes have been growing around 9% a year and we need the power of compounding to allow us to accumulate enough capital to be able to retire with a reasonable income as we grow older.
I wish I could recommend a better guide. The books by John Bogle are good, but for many people untrained in the investment industry they can be quite daunting. And some writers are recommending exchange traded funds (ETFs) just like all the hype about mutual funds so many years ago. ETFs have proliferated to the point where is can be very confusing for someone not trained in investment analysis. What is needed is a good solid guide for sophisticated savers who need help thinking through and deciding on the key elements and factors which will lead to a positive investment experience with index funds and ETFs.