This is a book review for The Smartest Investment Book You’ll Ever Read by Daniel Solin.
The book has an arrogant title. The title is also a knockoff from the popular book The Only Investment Guide You’ll Ever Need by Andrew Tobias. Andrew Tobias didn’t say his book was the smartest. He only said it was the only investment guide you’ll ever need, meaning you’ll be OK if you just read that one book but everything else will be extra knowledge. I first came across this book last year while browsing at Barnes & Noble (I wrote about the misleading chart in the book). So the arrogant title worked as intended. It grabs people’s attention.
Now that I had a chance to read the whole book, it isn’t too bad. This is another book about investing in index funds (or ETFs). Basically another person “discovered” indexing. If you are a regular reader of this blog, you probably won’t find anything new in this book. For someone new or who didn’t pay much attention to investing, the book conveys that a simple strategy can be very effective and stress-free. For people who are still trapped by brokers and advisors (it’s hard to believe, but there are still so many!), this book can be refreshing.
The author Dan Solin is a securities arbitration lawyer. You can tell he has big problems with brokers and advisors because more than half of the book is about what not to do, i.e. don’t listen to brokers, advisors, or the media. It says if you just invest in 3 broadly diversified mutual funds (U.S. stocks, International stocks, and bonds), you will be all set. The portfolio construction comes down to answering just one question:
“How much do you want to allocate your portfolio to stocks?”
The book gave four choices: 20%, 40%, 60%, 80%. After that, split the stocks to 70% U.S. and 30% international and you are done. It’s basically the first two steps in my Cascading Asset Allocation Method. The book gives specific examples using Vanguard, Fidelity, and T. Rowe Price funds.
While the ideas in the book aren’t anything new, the presentation is different from many other books. This small book (177 pages) is divided into 44 chapters and two appendices. The longest “chapter” is 4 pages. The shortest “chapter” is half of a page, shorter than a typical blog post you find here. I guess it was written with today’s short-attention-span readers in mind. This style coming from a lawyer is a surprise to me*.
For someone who is new to investing, this book is less overwhelming, although it feels to me just repackaging of what others have said all along. I have more original content on this blog than what’s in the book. If you are looking for a book for a newbie, I would recommend Smart and Simple Financial Strategies for Busy People by Jane Bryant Quinn, the #1 book on my Recommended Reading List in the Basics category.
Final verdict: 2 stars out of 4. Skip; you won’t miss anything.
* Only until the very end of the book, the tail of a lawyer finally showed. It says in tiny font and long sentences:
“The author and publisher specifically disclaim any responsibility for any liability, loss, or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this book.”
“The author does not assume any responsibility for actions or nonactions taken by people who have read this book, and no one shall be entitled to a claim for detrimental reliance based upon any information provided or expressed herein.”