Where are the Customers’ Yachts? is an essential and witty read for anybody who thinks finance, stock broking and fund management are respectable professions dedicated to increasing the wealth of their customers.
The unfortunate truth is that Wall Street and the City of London are staffed by cynical sharks whose only true interest is in lining their own pockets by robbing yours.
If you are an investor you also need to read this: A Random Walk Down Wall Street. One of the more sensible investment books around – there aren’t very many.
Markets are random and unpredictable – don’t let anyone tell you otherwise. I have no idea whether stock markets will provide an all in return of 8% a year over the next 100 years as they have in the past but if they do, then all you need to do to participate is to buy one fund: a simple index tracker covering world stock markets.
Oh, plus a shortish term global sovereign bond fund if you want to mitigate volatility and drawdown. And rebalance annually. More stocks = more volatility and drawdown, more bonds = less volatility and less drawdown.
Industry standard has long been 60% stocks and 40% bonds rebalanced annually. If economic growth continues then you don’t need much else to participate.
I do not give investment advice – so go and see your stockbroker. Sadly he is unlikely to recommend anything so simple as this. He is the guy who gets the yacht – not you.
Weltanschauung 