In The Big Investment Lie (Berrett-Koehler Publishers 2007), Michael Edesess provides a revealing, comprehensive, insider's view of the investment advice business. The business' foundation is what Edesess calls "the big investment lie": the widely-held view -- reinforced through carpet-bombing marketing -- that professional active investment management provides clients with value.
A guess: deciding to title the book The Big Investment Lie was not easy. The title, although attention-catching, may have detracted from the book's greater acceptance because the title and a description of "the lie" itself are first stated without predicate. (The first sentence of the jacket's inside front cover doesn't mince words: "The investment advice and management industry is built on fraud: the idea that professional advisors can predictably and consistently help you get a better rate of return on your investments.") Many prospective readers may have thought the idea preposterous and read no further. And others may have concluded that the book must be enough out of the mainstream that it can't be serious. But the book absolutely is serious, and very worthwhile.
Two observations: first, the book's overarching skepticism about investment professionals is not uplifting reading. But please persevere: the skepticism is well-founded and healthy for investment success. Second, portions of the book read like an atonement for Edesess' years in the business.
I enthusiastically recommend The Big Investment Lie. It's an excellent, practical guide for someone considering a relationship with a financial advisor, stockbroker, or investment manager, and alternatives to that relationship.
Edesess' mathematician background provides perspectives and insights. His "math logic," experience in the investment advice business, and detailed research will lead you to think again about the risk-adjusted, net-of-costs performance - past or likely future - of that Name Brand Financial Advisor (as seen on TV!) or that all-outward-signs-indicate-success alternative investments firm. The book's endnotes are very helpful and further drive home the author's points.
A guess: deciding to title the book The Big Investment Lie was not easy. The title, although attention-catching, may have detracted from the book's greater acceptance because the title and a description of "the lie" itself are first stated without predicate. (The first sentence of the jacket's inside front cover doesn't mince words: "The investment advice and management industry is built on fraud: the idea that professional advisors can predictably and consistently help you get a better rate of return on your investments.") Many prospective readers may have thought the idea preposterous and read no further. And others may have concluded that the book must be enough out of the mainstream that it can't be serious. But the book absolutely is serious, and very worthwhile.
Two observations: first, the book's overarching skepticism about investment professionals is not uplifting reading. But please persevere: the skepticism is well-founded and healthy for investment success. Second, portions of the book read like an atonement for Edesess' years in the business.
I enthusiastically recommend The Big Investment Lie. It's an excellent, practical guide for someone considering a relationship with a financial advisor, stockbroker, or investment manager, and alternatives to that relationship.
No comments:
Post a Comment