Based on path-breaking new research, in The Big Secret for the Small Investor you will find out how anyone can beat the market, the index funds and the experts by following a new approach that relies on the principles of value investing, common sense and quantitative discipline. Along the way, learn where “value” comes from, how markets work, and what really happens on Wall Street. By journey’s end, small investors (and even not-so-small investors) will have found their way to some excellent new investment choices.
When it comes to investing in the stock market, investors have plenty of options:
- They can do it themselves. Trillions of dollars are invested this way. (Of course, the only problem here is that most people have no idea how to analyze and choose individual stocks. Wait, did I say the only problem? I really meant most investors have no idea how to construct a stock portfolio, most have no idea when to buy and sell, and most have no idea how much to invest in the market in the first place. Okay, that’s better.)
- They can give it to professionals to invest. Trillions of dollars are invested this way.(Though, after fees and other institutional impediments, most don’t add value. In fact, most professionals actually underperform the market averages over time. Oh, I almost forgot—it may be even harder to pick good professional managers than it is to pick good individual stocks.)
- They can invest in traditional index funds. Trillions of dollars are also invested this way. (This is a great way to match the major market averages, to pay very low fees, and to beat most professional managers. Then again, investing this way is seriously flawed—and almost a guarantee of subpar investment returns over time.)
- They can read The Big Secret for the Small Investor and do something else. Not much is invested this way. (Yet …)
For years individual investors have asked me how they should go about investing their savings in the stock market. After all, I’m a longtime business school professor and institutional money manager, and they figure I should know. Yet for years I haven’t had a good answer. You see, Wall Street isn’t very kind to small investors. While it’s true that individual investors have many options, for one reason or another (and usually one reason and another) most choices aren’t very good. Well, with this book, I finally have what I think is a good answer to that very important question. And it’s an answer that should work well for investors both big and small.
The Big Secret for the Small Investor: A New Route to Long-Term Investment Success By Joel Greenblatt pdf