stocks

I've read a number of good personal finance and investment books but I have to say that I like this one most of all. The author is well respected and an authority in the field. The book is a quick read but it's filled with useful information written in a very readable style. I wish every book was like this.

Malkiel gives the reader some very fundamental advice on investments (index funds), asset allocation and planning your finances based on your risk aversion and age. It's simple and very straightforward. There are no gimmicks or get quick-rich schemes. And that's what I really liked about the book. This book gave me the confidence to manage my own investments and knowledge to do it intelligently. I would highly recommend this book to anyone especially people who are new to investing or people who are confused about all the options out there. Simply a great book!

RWG to Investing shines in its simplicity and brilliance.
The only investment book and probably the only financial advice (advisor) you will ever need.

This book has a lot of interesting information however, the theory behind it, that nobody can beat the stock market except for "business people", because stocks are efficiently priced is a bit absurd. Every day I receive a fax touting one pink sheet stock or the other. I have, out of curiosity looked into some of these company's and found that they often have little or no assets and are mainly shell corporations. The point is that because of the constant touting there stockprice almost always rise significantly and than plummets. This "pump and dump" form of market inefficiency extends to much larger securities (e.g. .Com bubble) as well. It is difficult to argue that since stockprices are determined by people who aren't always rational, that value of a security is at any random point in time rationally priced.

The argument that managed funds (after fee's) underperform index funds is a truism just as much as stocks will outperform bonds over the long term is. Stocks outperform bonds because a company's wouldn't borrow money unless they could reinvest that money at a higher rate. Similarly, Mutual Funds, in aggregate, since they own so many securities become in effect almost the same as index funds except they charge higher fee's. If your really interested in learning more about proper portfolio allocation read The Intelligent Investor by Benjamin Graham.