The Elements of Investing by Burton G. Malkiel (PDF)

Description

A timeless, easy-to-read guide on life-long investment principles that can help any investor succeedThe Elements of Investing has a single-minded goal: to teach the principles of investing in the same pared-to-bone manner that Professor William Strunk Jr. once taught composition to students at Harvard, using his classic little book, The Elements of Style. With great daring, Ellis and Malkiel imagined their own Little Red Schoolhouse course in investing for every investor around the world-and then penned this book.The Elements of Investing hacks away at all the overtrading and over thinking so predominant in the hyperactive thought patterns of the average investor. Malkiel and Ellis offer investors a set of simple but powerful thoughts on how to challenge Mr. Market at his own game, and win by not losing. All the need-to-know rules and investment principles can be found here.Contains sound investment advice and simple principles of investing from two of the most respected individuals in the investment worldBurton G. Malkiel is the bestselling author of A Random Walk Down Wall Street and Charles D. Ellis is the bestselling author of Winning the Loser’s GameShows how to deal with an investor’s own worst enemies: fear and greedA disciplined approach to investing, complemented by conviction, is all you need to succeed. This timely guide will help you develop these skills and make the most of your time in today’s market.

User’s Reviews

Reviews from Amazon users which were colected at the time this book was published on the website:

⭐Malkiel (of

⭐fame) and Ellis present the very basics of investing in a short, compact form. And I do mean very basics. Anyone more than slightly informed about personal finance will likely be familiar with everything in this book: save money, cut your expenses, don’t have credit card debt, invest your money, don’t try to beat the market, use index funds, hold onto them for the long run. (Maybe I missed something in there, but I doubt I missed much.) Yet for someone not familiar with these fundamentals, this is an informative book. And because it’s presented so minimally, it’s an easy read that has all the more chance of actually being read by the audience that needs it.That said, this book has some clever points to it. For example, in relating the idea of dollar cost averaging, the authors present an example of how an investor using dollar cost averaging can make money even in a down market. (The trick: by investing at the low points, the gains for that portion of investment may outstrip the losses from the portions bought at higher prices.) That’s not the sort of thing that always occurs even to savvy investors.And it also has some very practical information: particularly, it lists several index funds of various sorts that the authors think are reasonable choices for the novice investor. This is perhaps the best part of the book, for while much of the rest of the information are things that might be guessed, picking an actual index fund (versus knowing that you should pick one) is not something that can be guessed. On this particular point, the book’s providing some expert opinions is quite useful, and not something you can find so easily elsewhere (or at least with so much authority — you can find suggestions all over the personal finance universe on the Internet, but trusting any of them is a quite different matter).But overall, this is a very simple book, without frills, for the person just beginning to care about his personal finances. Particularly given the recent Pollyanna-ishness of investors concerning whether the whole idea of buy-and-hold must be thrown out, this book presents timely and useful advice. I do wish it had a little more meat to it. But what meat there is is simply and powerfully presented.

⭐I was looking forward to the authors coming out with a new book to give their investment advice after the 2008 and early 2009 stock market crash. Their fundamentals appears to be the same with the use of broad based index funds, but their stock allocations have shifted to having more money invested globally outside of the United States. You’ll have to purchase the book to read their recommendations. Also, they have given their opinion about Vanguard’s new Total World index fund and both have given their individual asset allocations based on a person’s age with Burton Malkiel’s being more conservative and Charles Ellis’ being more aggressive. They both also give a list of recommended index funds along with a surprise for us regarding their individual stock picking. It’s not what your thinking like day trading. Trust me.The authors’ do say that the book will help 90% of all investors, with the remaining 10% of investors seeking professional help with complicated situations.All around very good book and a quick read. Its good for those relatively new to investing because they give personal finance advice also, and the book is also good for experienced investors for their expert advice regarding investing after the 2008/early 2009 stock market crash.I highly recommend the book.

⭐If this book were a cookbook, it would be teaching you how to boil eggs properly and make toast. It would be showing you how to cook the staples, the basics. It is geared toward those who are interested in investing but overwhelmed with all the choices out there and don’t know where to start. The basic doctrine this book is “Keep It Simple Stupid” (although I guess they don’t want to offend so they use Sweetheart instead). You won’t learn any fancy investing tricks in this brief common sense guide. It’s more of a set of fundamental principles (like sticking to broad market indexes and saving saving saving), but it does help drive home a point to those people (like myself) who want to invest but don’t consider themselves professionals. If you don’t try to get caught up in the latest investing fads, and don’t try to beat the market, your portfolio can (and probably will) perform much better than average. I didn’t find a single piece of advice in this book that I disagreed with. It really is common sense. It will help re-orient you, should you find yourself getting pulled into the next bubble.

⭐This book, by Burton Malkiel, is a must for people who want to know about investing but did not know where to go. Burton Malkiel explains investing and economics in a way that you do not feel you are being spoken down to. The language is clear and the chapters flow in just the right way too.I thought so much of this book that I bought 5 additional copies to give to members of my family and have recommended it to many friends of mine.After I gave this book to my wife to read, and she fought me on it for a short time, she was saying things like, “did you know this or that”. It inspired her to make an investment choice without my assistance and she has felt more sure of what she is doing with our mutual funds since that time.Please go to the library and read this book and then you too will buy a copy.

⭐This book is good general investment advice fir beginners. A very shirt book. Easy to read. I wanted more technical detail, but perhaps this book is better suited to beginners.

⭐Worth reading for every investor

⭐『ウォール街のランダムウォーカー』と『敗者のゲーム』のエッセンス。チャールズ・エリスの方が、バートン・マルキールよりも株式に強気なのが分かる。ジョン・ボーグルの『The Little Book of Common Sense Investing(邦題：お金の常識)』の方が、どっちかというと、国籍に関係なく楽しめるかも。アメリカ人向けなので、カントリーバイアスがアメリカ偏重。※外国株式で為替リスクをとりたくないアメリカ人は、アメリカ株式、アメリカ債券のみで十分だと言ったりする点。そこを考慮して読み進めてください。

⭐Not found.

⭐Finance books for me are like what the gym memberships are to New Year resolutioners. You have such high hopes when you have them in your hand, you will change your life, become focused and afterward be uber lean. It’s all about good intentions.Elements of Investing is not a book promising to solve your financial problems; giving you a 2 week financial detox or the mircale of stock market investments returns that will allow you to quit your job at 30. What it does do is condense the elements of good financial management into a small booklet.Of course we get the usual speech about motivations for saving and spending, how we should get a pension (albeit the book talks about the American system!) and the importance of a good budget. It’s covering old ground but like getting a dental check, necessary for good health. I find the real beauty of this book is the small equations is gives to calculate what your return from savings and investments are, the calculations can also be used to establish what your returns need to be per year to achieve a target. It is simple well written stuff and I love it for it. It is one of the “elements” I regularly use when planning long term saving.Some criticise the book by saying it is too short, but if something is taken down to the basic elements – it is going to be small because it is simple. Elements of Investing real strength comes from reminding us that small is better and more achievable – dreams of making it big buying some shares rarely goes anywhere. The only downside of the book is it’s American slant, particularly on pensions.I may not be a millionaire – but I realised that I was gonna get a lot fitter by walking rather than having a gym membership I never use. I started small by cancelling that membership saving myself £220 per year – it is now in my Cash ISA.That the Elements of Saving way.

⭐Burt Malkiel is the household name behind the far better

⭐A Random Walk Down Wall Street: A Time-Tested Strategy for Successful Investing

⭐, the book that posits the efficiency of the financial markets.

⭐The Elements of Investing

⭐, co-written with Vanguard director Charles Ellis, is in essence a Saving-for-Dummies title. Not about Investing, but about long term Saving. The book is written exclusively for a US audience and practical recommendations (e.g. tax tips, fund selections) are entirely irrelevant to non-US savers.There’s nothing wrong with writing a book about saving, unless you call it a book about investing. Investing presupposes you intend to take risk in order to make a profit, saving means you try to exclude risk and therefore settle for a lesser return. Malkiel’s proposal is that all should save by investing in low cost broad-based market index funds (or equivalent ETFs) and start doing so early on to benefit from compounding interest. He also advises practicing dollar cost averaging by regularly saving fixed amounts over long periods of time. Malkiel does not believe we can outguess any other investor, let alone the market as a whole, in how a stock or even a market is going to perform. There’s arguably plenty of academic research to back up the underperformance of fund managers, and Malkiel’s advice is therefore not entirely unreasonable.If you’re an investment/finance ignoramus (aren’t we all to some extent? OK, I’ll hold my hand up to that one), this advice is even very relevant. But, it is less so if you’re a more seasoned market observer/participant. Malkiel and Ellis make sweeping judgments pertaining to e.g. charting/technical analysis, but then proceed to lend some credence to behavioural finance. I’d have thought charting is the graphical interpretation of behavioural finance precepts. Only value investors, spearheaded by Buffett, find some grace in Malkiel’s eyes and it is noticeable that he, humbly, puts himself and Ellis in that league. Another sweeping piece of advice contains the avoidance of credit cards altogether because they cost too much and make you dependent on your lender’s repayment terms. That’s true, unless you always repay your balance in full in which case a free card means one month’s free credit every 12 months of the year. That should be worth something, not? Finally, there’s enough research by McKinlay and other reputed authors to show financial markets are not fully efficient. Some humility would, thus, behove Messrs. Malkiel and Ellis.All in all, this is an interesting read for your average US citizen having lost his faith in the markets, funds and tipsters alike and seeking a new haven for his hard earned cash. Malkiel points the way to a form of low risk saving. His cost benchmark is that no fund should be charging more than, say, 0.25% in annual management fees which excludes just about every index fund in the UK and Continental Europe.Why Wiley decided to publish this book in the otherwise excellent series of the “Little Book Big Profits” investment titles is a mystery to me, but the name Malkiel was probably the deciding factor. James Montier’s

⭐The Little Book of Behavioral Investing: How Not to be Your Own Worst Enemy (Little Book, Big Profits)

⭐is far more deserving with respect to the subject matter tentatively broached by Malkiel.

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