The Elements of Investing: Easy Lessons for Every Investor

Elements of Investing provides a road map that can multiply your savings to reach your financial target. It starts with understanding the answers to some basic questions, like when will you need this money? And how well can you tolerate investment risk? The answers to those questions can help you build an appropriate asset allocation between stocks, bonds, and cash.

Introduction:

Elements of Investing brings a clear-eyed perspective to the current environment, including a new chapter describing the aftermath of the global financial crisis, and its impact on the way people are rethinking their approach to investing. Pundits bombard us with claims that the old rules no longer apply.

They say that we are in a protracted environment of low returns and high volatility, and that people should abandon buy-and-hold investing and become more opportunistic. Malkiel and Ellis take umbrage with these claims, and at Vanguard, so do we. The authors reaffirm the views they expressed in the first edition and they provide supporting evidence. Diversification, rebalancing, dollar-cost averaging, and low-cost indexing remain the best path to achieve investment success.

This book is a must-read for all investors—those new to investing and those who have been at it for a while. It should be required reading in high school because the power of compounding is particularly valuable at a young age. But veteran investors will also benefi t from reading this book as it debunks many misconceptions and identifies behavioral biases that stand in the way of successful investing. And, just to make sure you do not fall prey to the siren’s song of a better way, you should reread this book every several years.

Contents:

– It All Starts with Saving

• Save
• Index
• Diversify
• Avoid Blunders
• Keep It Simple
• Timeless Lessons for Troubled Times

– A Super Simple Summary: KISS Investing

The Elements of Investing: Easy Lessons for Every Investor By Burton G. Malkiel, Charles D. Ellis pdf