The Coffeehouse Investor: How To Build Wealth, Ignore Wall Street, And Get On With Your Life by Bill Schultheis (1998)

is a promising little book, basically suggesting that one should ignore the day-to-day noise coming from Wall Street and concentrate the longer term results. The three tenents offered: asset allocation, index funds and appropriate savings. This detached approach is sound at a high level (unless you can make money on the day-to-day fluctation, competing with a good number of very smart people running hedge funds going after the same profits), you have to step up your timeframe into where is less competition. But the actual details on all three approaches are very mainstream and less sensible. On the index funds (which are offered instead of trying to figure out which mutual fund is the winner, I did like the Outfox-the-Box game, you can get better results than 80% of mutual funds pitched by simply indexing, and doing so, you would also join great number of pension funds, who are approaching the market this same way), it is said that you need to have large value, large growth, small value, small growth and international. Beside these being arbitrary (why not than get into international growth and value, and midcap growth and value, and all other combinations coming to mind), the yearly rebalancing (between these and/or between your stock and bond funds) is likely a bad idea, as trends in segments this large run usually much longer than one year. Although following the advices given in this book, you would be better off than other investors chasing hot mutual funds, there are even simplier approaches available for investors open to understand the nature of risks taken and the rewards offered, when investing in the market. As the mountain climbing methaphors are very apt in the book, maybe the author would serve us better sticking to books about climbing instead.

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