New Book: The Future For Investors
Many of you will recognize the name of author Jeremy J. Siegel, a finance professor at the Wharton School, who wrote the classic book, Stocks For The Long Run.
Earlier this month, Professor Siegel introduced his latest book, The Future For Investors, in which he offers up a plethora of rather fascinating facts and insights as he explains why the "tried and true" should outperform the "bold and new."
Interestingly, Jeremy Siegel appeared today as a guest on the Noon Business Hour where he made several comments that I would like to pass along for your consideration. Firstly, he stated that we have entered into a different type of investment climate where keeping your entire portfolio invested in U.S. equities no longer makes sense, and he suggests investing 40% of your portfolio internationally, and doing so by adding a Global Index Fund to your portfolio mix.
Siegel also recommended that "at least 50% of your portfolio should be indexed" (and this can be done with either ETFs or index mutual funds).
And finally, Professor Siegel suggests that it makes good sense to pay attention to high dividend paying stocks; to consumer staples type businesses such as Coca Cola, Pepsico, Procter & Gamble, and the Wrigley Company. And also, to good dividend paying utility stocks as well.
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Earlier this month, Professor Siegel introduced his latest book, The Future For Investors, in which he offers up a plethora of rather fascinating facts and insights as he explains why the "tried and true" should outperform the "bold and new."
Interestingly, Jeremy Siegel appeared today as a guest on the Noon Business Hour where he made several comments that I would like to pass along for your consideration. Firstly, he stated that we have entered into a different type of investment climate where keeping your entire portfolio invested in U.S. equities no longer makes sense, and he suggests investing 40% of your portfolio internationally, and doing so by adding a Global Index Fund to your portfolio mix.
Siegel also recommended that "at least 50% of your portfolio should be indexed" (and this can be done with either ETFs or index mutual funds).
And finally, Professor Siegel suggests that it makes good sense to pay attention to high dividend paying stocks; to consumer staples type businesses such as Coca Cola, Pepsico, Procter & Gamble, and the Wrigley Company. And also, to good dividend paying utility stocks as well.
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posted by Bob Moser at
8:02 PM
3 Comments:
Reading the book now. So far the book is kinda wishi washi in my opinion. The underlining principle is to buy good companies and at good prices.
The premise that when a new company is added to the S&P 500 that is lowers the rate return becuase the newly added stock has already had a great run up in valuation to make the index is interesting. Makes sense for an equal weighed or value weighed index or fund.
My big problem with most etfs is that they only own 100 companies and the top 10 companies are 25%+ of the assets.
Its pretty hard to make money when buying the biggest marketcaps of the day. Its easy to make money sell the biggest marketcap of the day.
By
erik, at 7:44 PM
Well I would agree with your assessment of the book for the most part. Other reviews also tend to give the opinion that this book is rather shallow to say the least!
Re your comments about ETFs, perhaps you are seeking faster action than an ETF is meant to deliver. I think that ETFs are an excellent investment for any investor who has the discipline and the patience to allow the time value of money to work its magic!
By
Bob Moser, at 6:07 PM
Finished the book. It did not get better.
The emphasis on international is interesting. Siegel states that buying the country with the greatest productivity increases is a good bet to underperforms the international indexes. He uses China and Brazil as examples. But that is all he says. He had the data to suggest to buy the countries with the lowest valuations and hold them, but he never says this.
Also there is a discussion about how international companies will buy US assets and thus save our social security and allow retirees to see there assets.
The other hints were the buying the 20% lowest PE stocks in the S&P and/or buying the dogs the S&P as in dogs of Dow. Motley Fools mechanical investing board has much better back tested screens than these of similar science.
Your equity portfolio should be 50% USA, 50% foreign. The USA is indexed minus the above hints and on the industries you mentioned earlier.
The foreign stocks are an index fund. And again the index fund is market cap weighed so you get very very little of the emerging market that he talks highly about.
The emphasis on reinvesting dividends is also plexing since most brokerages do no allow this anymore. You need a mutual fund or a drip to achieve this.
By
erik, at 11:16 PM
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