The name of this new book by Larry Swedroe and Jared Kizer is long: The Only Guide to Alternative Investments You’ll Ever Need. It’s part of The Only Guide to … You’ll Ever Need trilogy. The other books in the same series have equally long names: The Only Guide to a Winning Investment Strategy You’ll Ever Need by Larry Swedroe and The Only Guide to a Winning Bond Strategy You’ll Ever Need by Larry Swedroe and Joseph Hempen.
The lead author Larry Swedroe is a principal of Buckingham Asset Management, an investment advisory firm in St. Louis, MO. He frequently posts on the Bogleheads forum, of which I’m the #6 registered user.
This book covers alternative investments, which are defined as investments outside of stocks, investment-grade bonds, and bank CDs. It puts 20 investments into four buckets: the good (6); the flawed (8); the bad (3); and the ugly (3). According to the authors, the good alternative investments are:
- real estate
- inflation-protected securities
- commodities
- international equities
- fixed annuities
- stable-value funds
Take look at the table of contents and see where the rest belong. I’m happy to see that I own five of the six good alternative investments and none of the flawed, bad, or ugly ones.
For each investment, the authors explained what make it good, flawed, bad or ugly, from many different angles, including return, risk, correlation with other assets in a portfolio, expenses, tax efficiency, liquidity, among others. They cited many academic studies to back up their evaluation. For the good investments, the book also recommends specific vehicles for implementation. In case the reader is not familiar with some of the terms, there is a glossary at the end of the book. In under 300 pages, the authors covered a lot of materials. There is hardly any fluff.
Because it deals with alternative investments, this book is not for beginner investors, who should first focus on the core asset classes of stocks and bonds. It assumes a level of knowledge best obtained from reading The Intelligent Asset Allocator by William Bernstein. For beginner investors, I have several other books on my Recommended Reading List.
Rating: ***** (Excellent). Placed on the Recommended Reading List in the Advanced category.
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simplesimon says
I just received this book from Amazon a couple days ago and I have just started to read it. I really wanted to understand REIT and commodities more before I started investing in them. I finished the REIT chapter and believe the rest of the book will be just as good.
indexfundfan says
The title of the book is a bit “gimmicky” — “The ONLY guide … you’ll ever need”. Really the ONLY guide?
I was trying to do some research on MLPs and it is interesting to see Larry say this of this/his book:
“My book does not cover MLPs
could not cover everything, and no real low cost effective way to own this stuff–see next point
They, at least the infrastructure plays, have some interesting characteristics, but hard to get rid of the unsystematic risks, which I don’t like taking
And right now they are being thrown under the bus with everything else–meaning getting hit by flight to quality. They may even be cheapest ever been now.
We are actually looking at a way to see if it can be done in diversified manner with reasonable costs–problem is the pain in the neck with taxes on all the K-1s.”
Obviously from his comments, MLPs could be an alternative investment. But it is not included in the ONLY guide you ever need. LOL.
The link to the conversation is below
http://www.bogleheads.org/forum/viewtopic.php?t=26122&highlight=partnerships
Harry Sit says
indexfundfan – I agree about the title. I also wonder whether Andrew Tobias feels ripped off. If I write a book “A Random Walk Along Wall Street” will I get into trouble for infringement? Andrew Tobias justified the original title on the word “need” and need is subjective. MLPs are alternative investment, but you don’t necessary need to know about them. 🙂
Larry Swedroe says
FWIW–Martin Fridson has been the book reviewer for the Journal of Financial and Quantitative Analysis for about 20 years. In the inaugural edition of The Investment Professional he wrote a review.
Here is the final sentence:
By covering that final base, The
Only Guide to Alternative Investments You’ll
Ever Need lives up to its title.
Martin Fridson, CFA, is the chief executive
officer of Fridson Investment Advisors.
Larry Swedroe says
Just a correction re Fridson, he is book reviewer for the Financial Analysts Journal, not the JFQA.
Also note that as most people are not aware that authors have very limited if any control over the title. The first book was not my title. Then the other two were just part of the trilogy so kept the name. The publishers have changed the names of almost all the books I have written.