Index Mutual Funds: Profiting from an Investment Revolution

Rating:
Summary: An Excellent Manual for the Intelligent Investor
Review: I have spent the last three months researching index funds for purposes of writing a professional paper, and this book is by far the best source of information on the topic that I have found. But it's more than that. In making the case for index funds, Mr. Simon provides a succinct, yet intelligible, description of modern portfolio theory and its place in the world of finance.

If you are interested in subjects like portfolio theory, decision-making under conditions of uncertainty, the efficient market hypotheses, game theory, the Third Restatement of Trusts and zero sum games, and just the mention of people as diverse as Peter L. Bernstein, John C. Bogle, Warren Buffett, Alfred Cowles, III, Eugene Fama, Mario Gabelli, Elaine Gazarelli, Edward C. Halbach, Jr., Roger Ibbotson, Peter Lynch, Burton G. Malkiel, Harry Markowitz, John Neff, William F. Sharpe, and Rex Sinquefield causes you to hyperventilate, then this book is for you.

Don't let the tacky cover put you off (It would be more appropriate for "How I Went From Nothing to Being a Billionaire in Three Weeks.") This is a well-written and useful book.

Rating:
Summary: In-depth coverage of Index Mutual Funds
Review: Scott Simon's book thoroughly reviews the many advantages of index funds, and the disadvantages of actively managed mutual funds. Many of the standard arguments are presented--the cost advantage of index funds, the difficulty in picking a superior actively managed mutual fund in advance, etc. But, the author has managed to add a few wrinkles here and there. Did you know that investing in index funds can reduce your stress? Well, according to this book that is one of the more important advantages.

The book is well documented (as you would expect from a former tax lawyer). Of note is a chapter devoted to the "nuts and bolts" of index funds which gives thorough details about the operations of index mutual funds. The appendix also contains good descriptions of the major indexes.

Rating:
Summary: Why Index Funds Are For You
Review: Simon clearly presents all the evidence as to why passive investing, also known as indexing, represents the best method for any investor to succeed in the market. He goes further by showing how investing in a portfolio of index funds allows the average investor to achieve both less risk and and an expectation of higher returns. Thus the investor is in tune with the precepts of Modern Portfolio Theory.

The proof is here - trying to beat the market is a loser's game. It's way against the odds and neither individual investors nor profesionals have deomonstrated any ability to beat the market on a consistent basis. Indexing provides market returns with lower costs, lower taxes, and less stress.