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More Straight Talk on Investing. Lessons for a Lifetime. Edition No. 1

  • Book
  • 336 Pages
  • June 2021
  • John Wiley and Sons Ltd
  • ID: 5240743

A practical and pithy guide to investing to help everyday investors achieve their long-term goals

The 21st century has been beset with three financial market shocks in its first 20 years, the bursting of the Tech Bubble in 2000-2002; the Global Financial Crisis of 2008-09; and 2020 COVID-19 crash. Given this backdrop, it is no wonder that investing can appear to be so daunting to individual investors.

As Chairman and CEO of Vanguard, one of the largest and most respected investment management companies in the world, Jack Brennan has spent his career helping people invest their money. In the newly updated More Straight Talk on Investing, he shares with you the lessons he has learned over his over four decades at Vanguard from a variety of market participants - from Main Street investors and 401(k) plan holders to veteran portfolio managers at the helm of Vanguard funds and sophisticated investment professionals overseeing top endowments and foundations.

This a comprehensive, but approachable book will help you develop the knowledge, confidence, and discipline to navigate the financial markets and attain investment success over the long term. While the financial planning and investing principles covered are timeless, a considerable amount has changed in the nearly 20 years since the first edition, including new products and services, lower costs, and ever-evolving regulation and legislation. An entire generation of investors has come of age over the past two decades and could benefit from understanding that sound and sensible investing is an effective way to achieve financial security.

This book will assist your manage your “serious” money - the dollars that you set aside for long-term goals, such as retirement or the education of your children. The book also emphasizes the concept of thinking of yourself as a “financial entrepreneur” - managing your financial life like owner manages a business.

In a straightforward, plain talk manner, the book demonstrates how to:

  • Build a balanced, diversified portfolio that meets your needs and goals
  • Evaluate mutual funds and ETFs with a discerning eye
  • Adhere to a long-term, disciplined approach to investing
  • Control your emotions and tune out the incessant “noise” in the media
  • Understand the risks and rewards of financial markets
  • Develop a prudent plan and investment policy statement to guide your path forward
  • Avoid the pitfalls and mistakes that can derail your investment program

With wit and wisdom, Brennan relays anecdotes and observations that demonstrate the enduring investment precepts that will serve as a guide to novice investors and as a practical refresher for seasoned investors. He has also added three new chapters focusing on evaluating advice options, garnering lessons from endowments, and dealing with the challenges of a low interest rate environment.

Table of Contents

Preface ix

Author’s Note xiii

Acknowledgments xv

Part I Master the Basics
A look at the financial facts of life.

1 Successful Investing is Easier Than You Think 3

2 You Gotta Have Trust 17

3 A Map to Success: Hmm, Sounds Like a Plan 29

4 Save More - Without Feeling the Pinch 45

5 Hope for the Best - But Prepare for Something Less 57

Part II Construct a Sensible Portfolio
Investing is like running a marathon, so you’ll want to prepare and train appropriately. Here’s how.

6 Balance and Diversification Help You Sleep at Night 71

7 You Need a Personal Investment Policy Whether You’re Starting with Zillions or Zip 85

8 Mutual Funds and Exchange-Traded Funds: The Easy Way to Diversify 99

9 How to Pick a Mutual Fund (and How Not To) 111

10 It’s What You Keep That Counts 137

11 Risk: Give It the Gut Test 155

12 Some Advice on Financial Advice 169

Part III Manage Your Investments With Focus and Discipline
Once you assemble a well-constructed portfolio, you don’t have to spend every waking moment of your life tending to it. In fact, you’ll be better off if you don’t.

13 Buy-and-Hold Really Works 179

14 Time is Everything 189

15 Routine Maintenance for Your Portfolio 197

16 Stupid Math Tricks for Smart Investors 209

Part IV Stay On Course
A look at the things that can cause investors to come unglued.

17 “It’s a Mad, Mad, Mad, Mad World” 217

18 Why You May Be Your Own Worst Enemy 227

19 Bear Markets Will Test Your Resolve 237

20 Navigating Distractions to Reach Your Destination 249

21 Is the “Smart Money” Smart? Yes, but. . . 259

22 Regrets? I’ve Had a Few 269

23 Getting to Boca 273

Afterword 281

Postscript 283

Appendix: Industry Terms 291

Index 307

Authors

John J. Brennan Dartmouth College; Harvard Business School. John Woerth Temple University.