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Unconventional Success

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Unconventional Success

A Fundamental Approach to Personal Investment

Free Press,

15 min read
10 take-aways
Text available

What's inside?

A seasoned, institutional portfolio manager explains what investments might work for ordinary investors.

Editorial Rating

7

Qualities

  • Analytical
  • Applicable
  • Background

Recommendation

Although for many investors, the stock market is the only game in town, author David F. Swensen, the experienced manager of Yale University’s endowment, suggests investing in logical low-cost, fair, nonprofit index funds that track the market closely. He advocates building a carefully balanced portfolio, and strongly recommends regular rebalancing. He comes to these conclusions based on his rigorous analysis of the returns achieved by a host of other investment media, especially mutual funds. In fact, he builds his investment guidebook around a scathing scolding of the mutual-fund industry, even though mutual funds also have strong supporters. getAbstract believes Swensen’s counsel will be useful for individual investors who face a bewildering array of choices. In fact, if you had a rich uncle on Wall Street to advise you, he would probably echo much of Swensen’s logical advice.

Summary

Investing Fundamentals

Uninformed investors make several common mistakes. The worst one is bypassing the basic principles of steady wealth building, and succumbing to the myth that anyone can “beat the stock market” and make a killing on Wall Street. Then, they try to build personal portfolios by attempting to pick winners, as if the market is a racetrack (and with about the same odds of success). The next error is trying to become a stock trader with relatively futile attempts to time the market alone or with calculated advice from an adviser.

Newspapers and magazines publish stock market tips, so naïve investors think they will find unique nuggets of advice that will make them rich. Advertisements sway them with a promise of quick riches. Such phony pledges breed dreams of yachts and diamonds based on being the smart speculator who reaps big profits at the expense of hundreds of other “dumb” market players. Forget about it.

Go back to basics. You can make money in stocks with a program of smart, steady, conservative investing through a successfully administered long-term portfolio. The stock market is not mysterious, but you must be wise to its ways. Retirement...

About the Author

David F. Swensen is the chief investment officer for Yale University. He was an innovator of new high-tech investments on Wall Street for several years. He is the author of Pioneering Portfolio Management.

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