Rating: 
Summary: At last...sanity.
Review: Finally - someone has drawn us the 'big picture.' Frank Armstrong has 'drawn' this picture of investing with easy-to-understand language. He has masterfully condensed and explained the volumes of data and conclusions found in not only the latest academic research on investing, but also on the historical analyses of many years of market observation and study. Mr. Armstrong clearly describes the world of investing. He erases the static and noise of the day-to-day ticker tape mentality and media circus hype. Instead of presenting investing as an ogoing sports event with unceasing, meaningless commentary and opinion, Mr. Armstrong sticks to the discernable (and proven) characteristics inherent in markets enabling the reader to distinguish fact from fiction. Anyone wishing to base their investment decisions on historical facts and solid methodology NEEDS to read this book. You will have a much clearer understanding of markets, and your investment decisions will be firmly rooted in proven soil.
Rating: 
Summary: no help
Review: For the uninitiated investor, The Informed Investor, provides a solid grounding in the basics of investing in index funds and mutual funds using an asset allocation approach. Armstrong does not provide earth shattering revelations or trade secrets of the markets, but does provide a methodical way of evaluating your investment needs and then showing you how to put together a practical mutual fund-type diversified portfolio. Most individual investors have no game plan or written investment goals. They may have a lofty goal of obtaining 10 - 20% annual returns over the long-term. Now that we've experienced a significant bear market-which may get worse - the investor needs to sit down and realistically assess his/her financial needs and use a time-tested investing approach. Armstrong's book offers a systematic approach to understanding the investment scene. He covers long-term trends and returns in the various investment categories from 1926 - 2000 and shows that stocks were the way to go - especially small company stocks. He then provides a 32-page informative discussion on assessing the risk of investing - a subject that many investors don't know too much about. Unfortunately, most investors pay little attention to this vital subject and end up losing their shirts because they don't understand the elements of risk. Armstrong then covers modern portfolio theory, the efficient frontier, and the overwhelming importance of proper asset allocation (e.g., stocks, bonds, and cash) compared to individual stock selection or market timing. Other topics covered include: whether managers add value (not really), benchmarks, controlling costs and taxes, and some investing horror stories. Armstrong provides interesting statistics on building a portfolio first with an allocation of 60% in the S&P 500 and 40% in long-term bonds from 1975- 2000. This portfolio provided and annual return of 14.43% with a standard deviation of 11.42%. He then provides different portfolio mixes and ends with a portfolio of investment vehicles that provide an annual return of 14.71% with a standard deviation of 9.09% -- a significant improvement in lowering its riskiness. Armstrong provides guidelines in investing for retirement using a global equity exposure and bonds. Once the allocation is determined the next step is to actually select the investment vehicles. Here, Armstrong focuses on selecting mutual funds, closed end funds unit investment trusts, REITs, variable annuities, ETFs, and index funds. He points out the differences of using investment advisors or doing it yourself. There is an appendix with a sample investment policy statement for individuals that can serve as a model for most individuals with appropriate adjustments, as necessary. In conclusion, Armstrong provides a practical, easy-to-implement asset allocation approach using no-load mutual funds and other vehicles. For individuals that need an advisor, he provides helpful hints in selecting one. The new and average investor will greatly benefit from the wisdom provided in this book.
Rating: 
Summary: Practical Introduction To Asset Allocation
Review: For the uninitiated investor, The Informed Investor, provides a solid grounding in the basics of investing in index funds and mutual funds using an asset allocation approach. Armstrong does not provide earth shattering revelations or trade secrets of the markets, but does provide a methodical way of evaluating your investment needs and then showing you how to put together a practical mutual fund-type diversified portfolio. Most individual investors have no game plan or written investment goals. They may have a lofty goal of obtaining 10 - 20% annual returns over the long-term. Now that we've experienced a significant bear market-which may get worse - the investor needs to sit down and realistically assess his/her financial needs and use a time-tested investing approach. Armstrong's book offers a systematic approach to understanding the investment scene. He covers long-term trends and returns in the various investment categories from 1926 - 2000 and shows that stocks were the way to go - especially small company stocks. He then provides a 32-page informative discussion on assessing the risk of investing - a subject that many investors don't know too much about. Unfortunately, most investors pay little attention to this vital subject and end up losing their shirts because they don't understand the elements of risk. Armstrong then covers modern portfolio theory, the efficient frontier, and the overwhelming importance of proper asset allocation (e.g., stocks, bonds, and cash) compared to individual stock selection or market timing. Other topics covered include: whether managers add value (not really), benchmarks, controlling costs and taxes, and some investing horror stories. Armstrong provides interesting statistics on building a portfolio first with an allocation of 60% in the S&P 500 and 40% in long-term bonds from 1975- 2000. This portfolio provided and annual return of 14.43% with a standard deviation of 11.42%. He then provides different portfolio mixes and ends with a portfolio of investment vehicles that provide an annual return of 14.71% with a standard deviation of 9.09% -- a significant improvement in lowering its riskiness. Armstrong provides guidelines in investing for retirement using a global equity exposure and bonds. Once the allocation is determined the next step is to actually select the investment vehicles. Here, Armstrong focuses on selecting mutual funds, closed end funds unit investment trusts, REITs, variable annuities, ETFs, and index funds. He points out the differences of using investment advisors or doing it yourself. There is an appendix with a sample investment policy statement for individuals that can serve as a model for most individuals with appropriate adjustments, as necessary. In conclusion, Armstrong provides a practical, easy-to-implement asset allocation approach using no-load mutual funds and other vehicles. For individuals that need an advisor, he provides helpful hints in selecting one. The new and average investor will greatly benefit from the wisdom provided in this book.
Rating:
Summary: An excellent guide to intelligent investing.
Review: For years I've tried to make sense out of all the information and advice obtained from stockbrokers, books, magazines (and less authoritative sources) regarding how to best invest my savings for retirement. Finally I discovered and read Frank Armstrong. I felt at last I had found a professional who has remarkable knowledge, understanding, insight and experience in the investment business. His new book, 'The Informed Investor', puts it all together in the world of investing. He uses academic research, common institutional practices and years of real world experience to explain the underlying forces that govern global stock markets. His book is written in straight forward easy to understand language that allows all of us investors large and small to maximize returns with minimum risk over time. 'The Informed Investor' should be on every investor's reading list.
Rating:
Summary: Sound, successful, long-term investing
Review: How does the disclaimer go, "Past performance is not necessarily a predictor of future returns?" If that is the case, how is an investor supposed to decide on any investment strategy? They all are based on "past performance." The key is to base your decisions on peer reviewed published research from the most respected financial scholars in the field. Frank Armstrong does just that in his book, "The Informed Investor."
In a relaxed conversational narrative, he presents a simple yet academically sound approach to investing. He offers evidence that dismisses the notion that stock picking is a skill and contends that stock-pickers add only additional costs, increased risk and lower returns when compared to appropriate indexes. Mr. Armstrong introduces the Nobel Prize winning concept of Modern Portfolio Theory, and how it is used to construct a portfolio that minimizes risk for a given level of return. He advocates controlling costs at every turn, including the use of low expense index mutual funds whenever possible and suggests ways to minimize the tax consequences of investing.
In the end you won't be left holding a basket of theory with no place to lay it all out. He answers the questions necessary to put together an investment plan. "How much do I need to accumulate if I need this much to live on in retirement? What assets and in what mix should I put in my portfolio? How do I raise or lower the risk in my portfolio and how might that affect return? How do I choose specific mutual funds? Who should I use for the custodian of my portfolio? How and when do I rebalance my portfolio? How much cash should I have as a minimum? How much can I safely withdraw after retirement and not run out in 20 to 30 years?"
From market timing to Motley Fool, it has taken me 15 years of reading and investing to understand that the approach of Frank Armstrong is the one I should have entrusted my financial future to all along. I have been following his advice for three to four years, through earlier publications, and have not been disappointed. Now, it's nice to have that advice in a single, clearly written book.
Rating:
Summary: Sound, successful, long-term investing
Review: How does the disclaimer go, "Past performance is not necessarily a predictor of future returns?" If that is the case, how is an investor supposed to decide on any investment strategy? They all are based on "past performance." The key is to base your decisions on peer reviewed published research from the most respected financial scholars in the field. Frank Armstrong does just that in his book, "The Informed Investor."
In a relaxed conversational narrative, he presents a simple yet academically sound approach to investing. He offers evidence that dismisses the notion that stock picking is a skill and contends that stock-pickers add only additional costs, increased risk and lower returns when compared to appropriate indexes. Mr. Armstrong introduces the Nobel Prize winning concept of Modern Portfolio Theory, and how it is used to construct a portfolio that minimizes risk for a given level of return. He advocates controlling costs at every turn, including the use of low expense index mutual funds whenever possible and suggests ways to minimize the tax consequences of investing.
In the end you won't be left holding a basket of theory with no place to lay it all out. He answers the questions necessary to put together an investment plan. "How much do I need to accumulate if I need this much to live on in retirement? What assets and in what mix should I put in my portfolio? How do I raise or lower the risk in my portfolio and how might that affect return? How do I choose specific mutual funds? Who should I use for the custodian of my portfolio? How and when do I rebalance my portfolio? How much cash should I have as a minimum? How much can I safely withdraw after retirement and not run out in 20 to 30 years?"
From market timing to Motley Fool, it has taken me 15 years of reading and investing to understand that the approach of Frank Armstrong is the one I should have entrusted my financial future to all along. I have been following his advice for three to four years, through earlier publications, and have not been disappointed. Now, it's nice to have that advice in a single, clearly written book.
Rating:
Summary: Finally an investment book I can understand
Review: I bought this after seeing it in a magazine and left it on the shelf for six months. I should have picked it up sooner. This is exactly what I needed. I have no formal training with investing. I thought investing was opening a savings account, buying CDs and putting money into my company's retirement plan. I had a crude understanding of the way things work, but this book opened my eyes to options (like index funds) that I did not know about -- and for that matter, would probably never be told about by a broker or my company's 401k administrator. It is especially informative in light of the accounting and broker scandals of the last year and a half. It is clearly written. No mumbo jumbo. The Informed Investor informs-as advertised.
Rating:
Summary: A born again informed investor
Review: I have been a practicing orthopedic surgeon for the last 45 years. As you might expect, colleagues who are overly confident, high-risk takers surround me. In my years at the surgeon's lunch table, I have listened to a multitude of schemes; systems; sure things known only to a select few; or guaranteed ways to become a millionaire by forty. Physicians, especially surgeons, are a target audience for financial salesmanship because they are high risk takers; quick decision makers; have excess income to invest; they need a large pot of capital to retire because the day they quit work there is no more business to bring in money; and finally because they have gone to school for such a long time they believe that they are well educated in all fields. In 1989 I returned to the University of Oregon to study for an MBA. I have always loved going to school. During my years in school, two events came together that would became my epiphany for handling any investments in the future. The first was a course in corporate finance; the second was Frank Armstrong and the monthly writing he was publishing online for AOL.
The textbook: Principals of Corporate Finance Third edition, authored by Richard Brealey and Stewart Myers; published by McGrawHill had a page with two unlabeled charts (Pg. 283). Both charts looked the same, yet the legend indicated that one was the Standard & Poor's Index for a 5-year period; the other recorded the results a weekly coin-toss for 5 years with a .25% drift to the positive. The reader was left to decide which was which. The chapter listed several sources for the statistical concepts illustrated by the two charts. I found the two listed below to be fascinating. 1.Theorie de La Speculation, Gauthier-Villars, Paris, 1900. Reprinted in English The Random Character of Stock Market Prices, M.I.T. Press, Cambridge, Mass 1964 2.The Analysis of Economic Time-Series, Part I. Prices, Journal of the Royal Statistical Society 1953 At the same time I read the articles Mr. Armstrong was publishing on-line. These essays would become the basis of his book The Informed Investor. His writing was a delight to read. Frank's articles were witty, full of allegories, and his explanations of a rather complex statistical theory were understandable.
Even if you do not enjoy reading books about investing, or market theory, The Informed Investor is fun to read because of the metaphors and imagery. You will recognize people you know who will fit perfectly with Franks descriptions of various investing personalities. Personally, the biggest change The Informed Investor has brought to me is a lowering of my anxiety level. I no longer have to take Zantacs very time I look at the stock quotes. I no longer take part, or become upset, with the daily rehashing of the latest stock market tips. During the discussions at the surgeons' lunch table I now have a big smile and truly enjoy the conversation for just its entertainment value.
Someone once asked me: "If indexing is such a good idea, why doesn't everyone follow the strategy?" I said that I had no fear that this would happen because human greed would always combined with "I know more than the other guy" to perpetuate the random walk of the market place.
Rating:
Summary: The best approach to stock market investment
Review: I have read literally hundreds of books on investing and have been an invester since 1982. The approach described in this book (and also The Intelligent Asset Allocator, by William Bernstein) is the most practical, sensible, way of investing I have found. It shows why market timing doesn't work, stock picking doesn't work, but asset allocation does. One of the great things about this approach is that once you're invested, there's almost nothing to do! Stop worrying, relax and know you're ideally invested for the long haul. Also, see Armstrong's website at www.investorsolutions.com.
Rating:
Summary: Assessing risk before one leaps
Review: The Informed Investor: A Hype-Free Guide To Constructing A Sound Financial Portfolio by Frank Armstrong III (Founder and Principal of Investor Solutions, Inc. and a frequent contributor to CNNfn.com) is a straightforward instructional guide to avoiding uncertainty and pitfalls in the world of modern investing. Of special interest is the presentation of the "Modern Portfolio Theory". From options specifically for the purpose of saving up for college, to expertly gathering intelligence and assessing risk before one leaps, and so much more, The Informed Investor is an expert "must-read" guide for nonspecialist general readers and aspiring investors from all financial backgrounds.
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