Seize control of your financial future with rock-solid advice from two of the world’s leading investment experts
Investors today are bombarded with conflicting advice about how to handle the increasingly volatile stock market. From pronouncements of the “death of diversification” to the supposed virtues of crypto, investors can be forgiven for being thoroughly confused.
It’s time to return to the basics. In the 10th Anniversary Edition of The Elements of Investing: Easy Lessons for Every Investor, investment legends Burton G. Malkiel and Charles D. Ellis deliver straightforward, digestible lessons in the investment rules and principles you need to follow to mitigate risk and realize long-term success in the markets.
Divided into six essential elements of investing, this concise book will teach you how to:
- Focus on the long-term and ignore short-term market fluctuations and movements
- Use employer-sponsored plans to supercharge your savings and returns and minimize your taxes
- Understand crucial investment subjects, like diversification, rebalancing, dollar-cost averaging, and indexing
So, forget the flavor of the week. Stick with the timeless and invaluable advice followed by the world’s most successful retail investors.
Table of Contents
Preface to Anniversary Edition xi
Foreword to Original Edition xv
Foreword to the Anniversary Edition xix
Introduction xxi
It All Starts with Saving 1
I. Save 3
First Do No Harm 5
Start Saving Early: Time is Money 6
The Amazing Rule of 72 7
Savvy Savings 11
Small Savings Tips 14
Big Ways to Save 15
Let the Government Help You Save 17
Own Your Home 18
How Do I Catch Up? 19
II. Index 23
Nobody Knows More Than the Market 24
The Index Fund Solution 27
Don’t Some Beat the Market? 29
Index Bonds 33
Index Internationally 34
Index Funds Have Big Advantages 36
One Warning 37
Confession 39
III. Diversify 41
Diversify Across Asset Classes 43
Diversify Across Markets 46
Diversify Over Time 47
Rebalance 51
IV. Avoid Blunders 57
Overconfidence 59
Beware of Mr. Market 61
The Penalty of Timing 65
More Mistakes 66
Minimize Costs 67
V. Keep It Simple 71
Review of Basic Rules 72
Asset Allocation 79
Asset Allocation Ranges 81
Investing in Retirement 85
Getting Specific 86
VI. Timeless Lessons for Troubled Times 95
Volatility and Dollar-Cost Averaging 97
Diversification is Still a Time-Honored Strategy to Reduce Risk 99
Rebalancing 101
Diversification and Rebalancing Together 103
Index at Least the Core of Your Portfolio 104
Fine-Tuning a Bond Diversification Strategy 107
A Final Thought 111
A Super Simple Summary: KISS Investing 113
Appendix: Save on Taxes Legally 115
Individual Retirement Accounts (IRAs) 115
Roth IRAs 117
Pension Plans 118
Tax-Advantaged Saving for Education 120
Recommended Reading 123
Acknowledgments 125
About the Authors 127
Index 129
