Dont spend your time worrying whether you can beat the markets you dont need to beat them to be a successful investor By showing you how to build a simple and rational portfolio and tailor it to your specific needs, Investing Demystified will help you generate superior returns.With his straightforward and jargon free advice, Lars Kroijer simplies the often complex world of finance and tells you everything you need to know and everything that you dont need to worry about in order to make the most from your investments.In Investing Demystified you willDiscover the mix of stocks, bonds and cash needed for a top performing portfolio Learn why the most broadly diversified and simplest portfolio makes the most sense Understand the right level of risk for you and how this affects your investments Find out why a low cost approach will yield benefits whilst leaving you with a higher quality portfolio Understand the implications of tax and liquidity Lars Kroijer takes a refreshing look at how everyday people can improve their fortunes by taking some simple investing steps Dr David Kuo, The Motley Fool In a world of the next big investment fad, Lars Kroijer takes us back to the essence of smart investing diversify, diversify, diversify And dont overpay for that either Coenraad Vrolijk, Managing Director of BlackrockAn important book that debunks common myths about investing A must read for ordinary investors Anita Raghavan, New York Times and author of The Billionaires Apprentice If you only read one book on how to manage your investments, read this one Benjamin Pritchett Brown, Investment Pensions Europe

4 thoughts on “Investing Demystified: How to create the best investment portfolio whatever your risk level (Financial Times Series)

  1. David David says:

    Good book takes the inexperienced long term saver or investor through the main things they might need to invest in, sets expectations very realistically, thinks things through very effectively, and arrives at a pretty simple solution that gives most investors just about as good a strategy as they can realistically achieve in the financial markets, using only two or three investments This is great for the typical person saving for the longer term, eg for retirement, who doesn t want the faff and the excitement bother of boning up on individual stocks they d rather be out doing something fun.What s not to like The only reason I dock one star is that the author is very dismissive of investing in property He gives one chart that compares property against government bonds, and points out that property ignoring costs, and ignoring rental income usually underperforms bonds and he infers that property is a bad long term investment However ignoring rental income is a bizarre assumption Correct his analysis for this, and property looks pretty good Factor in the point that you can borrow, at a low cost, to buy property, and property looks really great Most especially, buying your own home looks like a very sensible move.Possibly the author s motives are ethical and sound better to discourage a lot of amateur borrow to buy to let investors, in an overcrowded UK property market its better for society if everyone gets the chance to buy their own home, rather than a lot of people having to rent But his analysis doesn t particularly suggest this is a factor.He has some useful material on the detrimental impact of costs advisors, platforms, active funds, trading for the long term investor saver He also has some interesting and quite scary analysis of how often, and how bad, the downturns can be and how the stock market in Japan has fared over the last three decades sobering but useful to read this in times when everything is racing upwards.He rightly steers most readers towards a judicious blend of low risk and general market investing He identifies the pitfalls in a number of other exciting investments He admits there is a bit of a case for a few other investments eg commercial property, but he does make it clear that you can do fine ignoring these and sticking to your two main items.A fairly easy read I d happily give it 5 stars if I knew he was steering people away from property for noble reasons

  2. SimonJ SimonJ says:

    I have been looking for a general book on personal investing to recommend to friends and acquaintances who have asked me for investment advice which for regulatory and other reasons I don t want to give them I am a portfolio manager with other 20 years of experience investing in equities and bonds I have to say this is a very interesting and thoughtful book which I believe covers most of the bases I would definitely recommend it to anyone who wishes to set up and manage their own portfolio I think the main conclusion about the two types of assets global equities and government bonds and structure index funds is basically correct for most private investors I ve only really got a few points to critique Firstly, the data is now a little out of date Lars assumes a real annual total return of 0.5% from the risk free asset which he conventionally defines as short term bonds In 2019, in most markets, even mid duration bonds are not offering a positive real return For example, the yield on the 10 year Gilt UK government bond is c.1% while UK inflation as measured by CPI is running at c.2% Not only does this make bonds less attractive on an ex ante return basis but it also means the risk of investing in bonds is greater It would need a very deflationary recessionary environment in which these yields could fall further Of course this is by no means impossible but unlike in the last recession you are still unlikely to see big positive returns from your bond assets On the other hand, any pick up in inflation and interest rates will see your bond assets absolutely killed Secondly, and related to this, I would argue that you need to hold a higher percentage in equities than is discussed in the book I know Lars does not recommend a mix but he does discuss mainly a 50% equity 50% bond portfolio , provided your financial position means you do not ever need to touch the capital If you can structure a portfolio of say 80% equities and just draw dividends you can sleep safely at night because even if the capital value falls sharply you will still draw a dividend stream I know the dividend payments will likely fall so it s important you have enough of a buffer for this to not be a problem My big point is that yes equity values are highly volatile but as Shiller showed in his early 1980s paper the stream of dividends is actually far less volatile early example of his work on irrationality Thirdly, and again related to the two points above, Lars discusses fat tail scenarios including the government running out of money huge recession and the impact this has and arguing that is why you hold the risk free asset However I would argue that if the government runs out of money the risk has to be that they print money to meet their financial and legal obligations In the context of a highly indebted global economy this makes sense to me at least as a likelier disaster scenario Potentially then the fat tail scenario would be highly inflationaryin which case you want assets which offer protection against inflation Equities offer a partial protection because companies can raise prices but the other asset to consider would be inflation protected or index linked bonds Lars deals with these in an appendix and notes that in the UK these are quite expensive but TIPS in the US are better value The best way to gain exposure for a UK investor is through one of the absolute return specialists Capital Gearing Trust, Ruffer, Troy, etc I would consider a holding in one of these as an alternative or at least complementary asset to short dated bonds Lastly, just a note on currency risk I believe Lars knows this as an experienced investor, although I ve worked with portfolio managers who don t, but in the book it comes across as the currency a stock is listed in This is incorrect Currency exposure is mainly determined by where profit is derived from in detail which geography revenues are derived from and where the cost base is located Of course the currency the debt is in can provide a partial hedge Imagine a UK pub company with 100% of sales and costs in the UK I know they might have some import costs or exposure to foreign tourists but just ignore this for the sake of simplicity Imagine I as a UK investor own shares in this company Broadly speaking I have no currency risk Now suppose the company moves their listing to Paris and reports in Euros Do I now have currency risk No I don t The company is still based economically in the UK the listing reporting currency is not important in effect GBP is translated into Euros for reporting and then back into GBP for the UK investor A good real life example of this is Nestle it reports in Swiss francs but derives 95% of its profits outside of Switzerland You are mainly exposed to the global economy currencies and not Switzerland.

  3. MD MD says:

    I was directed to this book based on review feedback from other investment books I m really glad I purchased it I m new to investment, and I ve found the array of financial products available has been overwhelming when starting out, even despite doing a fair amount of reading around the subject for advice and stock pick recommendations I realised, in fact, that my initial attempts prior to obtaining this book were just too haphazard and not really backed by any logical thought or plan This book gave me a sound reason to target specific investments, and made me appreciate I needed to simplify my portfolio I d not have considered looking at stock like LSE VWRL and LSE VGOV Vanguard ETFs fulfilling the global index tracker and UK gilts bonds part of my portfolio respectively without the seasoned advice from the author, and would not have appreciated why I was doing it either In summary, I very much recommend the book for a simpler and profitable investment life.

  4. Customer Customer says:

    The book does not contain any new insights into how to make money from the markets, but reiterates many old established principles that are supported by successful investors such as Warren Buffett I found nothing in there that I have not read before but, with the benefit of 20 years experience of active investing, support the principles invest only money that you won t need at short notice understand that broad based market indices rise and fall but go higher over time know your own risk tolerance in terms of being capable of holding onto investments through the dips invest small but regular amounts in world indices and wait for the market to do its work.