5 comments about iMoney: Profitable ETF Strategies for Every Investor.

1. Mr. Lydon provides a very good introduction to ETF's. He outlines why they may be a better investment vehicle than mutual funds and he adequately explains all the different types of ETF's. For the novice reader, this book is an excellent place to begin. For the more seasoned investor it may give them a small push to break away from the world of managed mutual funds. Overall, the book is very well written, is factual and reads easily: as if Mr. Lydon is teaching you directly. As a short term trader, I hope Mr. Lydon writes a book on day and swing trading ETF's. I therefor give the book 5 stars for the beginner and 3 for the more seasoned investor with an average of 4 stars.



2. This book is about ETFs which stand for Exchange Trade Funds, which is nothing but publicly traded funds. The author says that investing through ETFs is cost effective, tax friendly, and less risky because of diversification. They can give investors access to investments that are not available through traditional mutual funds. For example, investors looking to invest in emerging countries such as China or India can do so with less risk through ETFs. The same applies to investing in commodities or currencies. This book does a pretty good job of introducing readers to the fast-growing investment product, ETFs.
   
   - Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market



3. THis book was OK. A week after I rec'd it I made 4 trades buying / selling 4 different ETF's- each one only held 1 to 4 days and made close to $1000. The book is a good primer, but be careful INVESTING in ETF' in this volatile market. SHort term - and I mean short term TRADING is probably better.The book was written before all of the current financial mess and bailouts. You can no longer assume anything when it comes to the financial markets. Good Luck.
   
   
   
   O



4. Decent book and nice introduction into the world of ETF's. I personally miss a way to get invested when the market heads south. "How to rebalance your portfolio and enter short-funds?" All the constructed an suggested portfolio's have an optimistic and LONG-SIDE vision on the stock market.



5. I would purchase Richard Ferri's book over this one, but, if money is no object buy both of them (I did!). I would add Richard Ferri's book on Asset Allocation.
   
   John

5 comments about The Great Mutual Fund Trap: An Investment Recovery Plan.

1. Although I have read several books on passive investing, I thought I'd try one more. This book covers the same ground as many others but with a fresh twist, fresh arguments, and plenty of insights I had not seen elsewhere. If you hope to identify superior funds or fund managers, read this book first to get a realistic idea of the odds of success. The authors offer numerous myth-debunking insights. Their analysis of the 'Dogs of the Dow' strategy is alone worth the price of the book, as is their explanation of how new funds are managed to achieve temporary spectacular results. All this speaks to the futility of trying to beat the market. Unfortunately, the alternative to trying to beat the market is accepting market-average returns - which for the past 10 years have been miserable. How can one be happy about saving 1% a year on fees with an index fund, if one loses 30% of one's capital in a bear market? To me this latter issue is much more important. I would have liked to see it given more attention by these excellent authors.



2. The Great Mutual Fund Trap is primarily a compilation of complaints about mutual funds and conveyed little new or useful information. To a great extent the information could have been consolitated in about a dozen pages, but then it could not have been sold as a book.
   Someone with no financial investing experience could learn about the problems with mutual funds from the book. But I would not recommend it.



3. I feel this book is a must read for any individual investor who wants long term success. For 10 years I have been trying to become a confident, knowledgable investor. I read the books and magazines, the Financial Times, I roam MSN Money, I listen to radio shows etc. I have experimented and learned a great deal, done some things well and made many mistakes always feeling that most of the time my results--both gains and loses--seem random. I also have an actively managed account that seems to get the same random results I get but for much more expense. Upon reading this book all my experiences came together in a clear understanding that the market is indeed random and how I can best participate in it. Baer and Gensler not only affirm what I had learned here and there from others but many new things as well. They do so with excellent substantiation in a readable, straightforward manner that gave me the confidence I was looking for to make dramatic changes in my financial holdings. They gave me simple, excellent recommendations to execute my plan and navigate past the the traps laid out by investment companies. I agree with one reviewer that I too was amazed at how much I did not know. Filling in those gaps so I can now make informed choices was certainly worth the small investment in buyng this book.



4. It's a very well written book. The main purpose of this book is to show that mutual funds industry overall does not provide a good choices for regular individual investors and the book covers this topics exceptionally. It really reveals the real intentions of the industry and shows that this is the only way this indstry can work. The book advocates passive investment and especially index funds and exchange traded funds (ETF). While there were already quite a few good, if controversial, books about efficient market theory ('You can't beat the market'), such as famous 'Random walk On Wall Street', this book brings more details about today market environment and explains what choices passive investor has. My only complain is that sometimes I feel some kind of zealotry in authors considerations. Even for somebody that believes in efficient market theory some of the statements in this books could seem very questionable. Stock mutual funds takes majority of books space but the moment authors venture to the other territory (and they do try to cover practically all kinds of investments) their arguments often seem too absolute. Still, this is the book every investor in mutual funds must read (and it will probably convince you to make some changes in your investment strategy - it did this for me)



5. There is really nothing new in this book that has not been beat to death elsewhere and the reader will probably find William Bernstein's books more rewarding. For those who buy this book however you will not go too far wrong.

5 comments about John Bogle on Investing: The First 50 Years.

1. This book contains many of the speeches of John Bogle at various forums. Contains lots of insight and investing wisdom. Not recommended for those not familiar with Vanguard, "Bogleheads", or new to investing in general.



2. This book contains an excellent compilation of speeches that cover John Bogle's career and philosophy of investing. Investors at all levels will glean important information and motivation from his recommendations and thoughts on indexing. His thoughts give important ideas to keep financial information and markets in perspective. The only limit on the information in the book is that how much more global investing has become a part of the financial markets. However much valuable information is relevant and available which is key to effective investing.
   
   The book has five parts - the first four are speeches, and the last is his famous thesis. Part I is Investment Strategies for the Intelligent Investor, Part II is Taking on the Mutual Fund Industry, Part III is Economics and Idealism: The Vanguard Experiment, Part IV is Personal Perspectives and Part V is John Bogle's famous Princeton Thesis: The Economic Role of the Investment Company. All speeches are well worth the read, however, the book lends itself to a good ability to pick and choose what you are interested in. A clear and interesting read from a brilliant investment strategist.



3. I thought I was out of luck to own the book with Bogle's thesis...I'm very happy!!



4. John Bugle, one of the brightest minds of our century raises some of the most important financial questions, of the last 50 years. Bogle on Great Ideas in Financing includes four criteria: 1. Simplicity - Buy the whole market haystack, an index capable of matching the market. 2. Focus (Seek the hard crusted but nutritious bagel of earnings, dividends, and interest yields rather than the sweet donut taste of price with its high price earning multiples) 3. Efficiency (minimize frictional costs of fees, commissions, and taxes with an Wilshire 5000 index). 4. Stewardship (keep the interest of the client first). Bogle's index was free of tax, include a small transactional fee, represented 8000 stocks in the market, and matched the market rate of return.
   
   Mutual funds have become a vehicle for short-term speculation, a trend fostered in part by the industries focus on marketing. Today the average fund holds stock for 400 days compared to six years when Bogle graduated from Princeton. Most investors hold their mutual fund for 3 years rather than 15 years. Since 1980 - 2000 mutual fund assets have risen 70 fold from $100 billion to $6.5 trillion and assets of stock funds have risen 120 fold or $4.0 trillion. In a 15-year span there were 426 mutual fund boats and 113 sunken mutual fund boats. Survival was strong because of the generous returns of the market. However, Mutual fund efficiency was problem: 1. Sales tax, excessive fees, spending too much on marketing, failing to share economy of scale with the investors, and 90% turn over of the portfolio each year suggested one thing, "short term speculation" was becoming the norm. Mutual fund sites charge costs included a front-end sales commission of 6%; opportunity cost meaning held cash positions equal to 7% of assets with these asset earning smaller returns than available in stocks; a transactional cost of 1.7%; and operating cost equal to 1.2% per year.
   
   Bogle's outlook of the stock market is brilliant. Bogle states: financial economist cannot predict the future. The DOW may hit 36,000 and it may not. Who can predict accurately what the market will do? The market is not a machine. The market is not an insurance actuaries spreadsheet. However, the market performed remarkable well with price gaining 17% a year and at this rate doubling every four years. To understand the market lets look first too dividend yield and earnings growth because these elements provide the steady underlying force over the long pull. For two decades dividend yield equaled 4.5% and earning growth paced at 5.9% producing a 10.9% return. In 1970, P/E fell 50% from 16 times to 7.3 and dividend yield equaled 3.4% and annual earnings equaled 9.9% producing a 10.4% investment return and Bogle preached "stay the course". By 2000, dividends equaled 1%, earning growth rate reached 8%, and P/E ratios top 30. Again, Bogle preached, "time, risk, and control" raising a cautious outlook and a cry for investors to return back to investor basics of earnings, dividends, and yields.
   
   What were the factors associated with the 87 crash? 1. Stock prices were simply to high to the underlying earnings and dividends in comparison to higher yields available on fixed income securities. 2. Deterioration in economic outlook with no progress to reduce the federal deficit, no improvements in the trade imbalance, and inflation in the air. 3. Program trading in the futures market sparked massive computer driven sales. The impact being 35% of the equity traded out of the market. In 87, if you're a Contrarian, it is a good time to buy or hold.
   
   Thinking about 2000, Bogle observed for growth to remain constant over the next ten years, the P/E ratio would need to move from 30 to 67 an unlikely possibility. If in 2000, the P/E ratio fell too 12 then the market level would be 580 rather than 1400 with a P/E of 30. If the P/E fell from 30 to 20 then market return would drop to 5.5% less than the percentage rate of high yield bonds and such an event would be the first in stock history. Is the market comfort zone, a P/E of 15.5 and this fact suggests the market has moved to a level of high risk and possible correction? Bogle states, "Looking back 70 years, major market highs were almost invariably signaled when the dividends yield on stocks fell below 3%, or price earnings rose much about 20 times earnings". The purpose of any stock investment is cash now with the expectation of future flows of cash. A high P/E ratio means investors are expecting a large flow of future cash. The high prices are based on speculation about the cash flow in the future. If the future cash flow expectations are not rational does this mean short-term profit taking is picking clean the amateur investor?
   
   
   Bogle was left to reflect on two questions: 1. Will the bagel of investment fundamentals give us its usual sustenance? 2. And will the doughnut of speculation get even sweeter than it is today, or will it finally sour? Bogle concluded, "We are in a new era of investing".
   
   Warren Buffet said, "The art of investing in public companies is ... simply to acquire, at a sensible price a business with excellent economies and able, honest management. Thereafter, you need only monitor whether these qualities are being preserved."
   
   Bogle suggests two principles when dealing with risk 1. Get your asset allocation right, maintaining a long-term horizon, and stay the course. Bogle observed that the long term real return on stock is 7.5%. Assuming one has a million dollars that is $75,000 annual income. 2. Diversity some of the risk away by introducing equities with reliable different correlations with the U.S market. Maybe, we will see the creation of a worldwide index, 60/40 - 60 percent U.S stock and 40 percent other? Bogle stresses investors not too speculate, however, life is short and if one needs too speculate they should limit the amount too 5 percent in the gamble for higher profits. Bogle's is betting on the performance of the whole market index rather than one sector mutual fund. Bogle is saying the market price is too high and a risk at its current levels. Bogle thinks mutual funds should be able to buy bonds and other stable securities as a part of the mutual fund mix.
   
   Thinking about bonds, bond yields drop as the economy moves to a recession because investor flee from stocks into bonds and since money is easy to acquire the rates drop. In this scenerio, short term traders buy bonds now with the anticipation the yields will drop more in the future and investor will pay more for these bonds with a higher yield. Again, a short-term speculation to capture a quick profit. However, if haystack of stocks continues producing 7.5% real returns then stay the course.



5. A good, practical, no-nonsense book on investing that emphasizes returning to basics and tried and true approaches that have always worked over the long term. He points out that investing needn't be, and perhaps shouldn't be, rocket science, and that you can do quite well in the market over the long term just by matching the performance of the market, and not trying to beat the market. As many people found out recently, pursuing a momentum strategy in an era of already overheated PE's and buying the latest hot story stock can be dangerous to your portfolio's health. Following a value-oriented fundamental approach with at least part of your portfolio can be a useful way of reducing volatility and improving your performance even if you're a died-in-the-wool momentum investor. This advice is especially timely coming as it does in the aftermath of the recent bear market. Another important point that many experts emphasize is that it's important to implement an investment program that matches your needs and risk tolerance, perhaps the most important thing in an investing program, since if you can't sleep at night, you probably won't be able to maintain it over the long haul.

   As Bogle points out, since 90% of fund managers fail to beat the averages over the long haul, the best strategy is to buy a fund that tracks the major indexes, which does two things. First, it minimizes costs, so you won't pay any management fees as you would for your typical mutual fund. Also, most investors don't realize such costs as advertising and sales expenses are minimal for an index, compared to other funds, and those are typically passed on to the investor in the load or management fee. Since there are now more mutual funds than there are stocks on the New York Stock Exchange (which is over 5000) and as I said, 90% of them fail to beat the indexes, it's hard to imagine a more sobering reason for making an index at least a part of your investing strategy. So overall, a good book on investing emphazing a no frills, common-sense, and back-to-basics approach.

   Although Bogle amply documents and demonstrates that most fund managers can't beat the averages over the long haul, and so the best way to invest in a mutual fund is to buy one that invests in the indexes and avoid the costs of managed funds, this doesn't mean a small investor can't beat the averages. The reason most funds don't is that most own so many stocks, as in the case of the Magellan fund, which used to own 1400 stocks, that they're forced to buy too many second and third tier stocks (or worse), which degrades their performance. The individual investor, however, can cherry-pick and do much better that way, assuming he's successful at it. But the point is that mutual funds have an inherent disadvantage in terms of owning a quality portfolio that inevitably stacks the odds against them, a limitation which small investor doesn't have.

   A brief side note here. I noticed the forward is by Paul Volcker, the former Federal Reserve Chairman who was succeeded by the present Al Greenspan. Volcker went on to head up the World Bank after that job, and I was glad to see he's still around and working.

4 comments about David Scott's Guide to Investing In Mutual Funds.

1. I have found Scott's book to be a real help in understanding how to select mutual funds. Now I know what fees to check and the type fund that best fits my needs. I have recommended this to my friends who were in the same sorry shape I was.



2. This is another good investment primer in Scott's series. An easy read that is especially worthwhile for someone wondering what mutual funds are all about. After reading this book you may also wonder why you may be paying so much to buy and own shares of a mutual fund.



3. This is a concise guide for beginning investors. It is easy to understand and reasonably complete. The material is too elementary for someone experienced in mutual fund investing but just about right for someone who is about to get their feet wet.



4. The author has written another superb book on investment. This book on mutual funds is fun to read, easy to understand and cuts through the fog of misunderstanding associated with mutual fund investing. It includes a detailed explanation of all the various mutual funds which includes equity, bond and money market funds. It also covers alternatives to mutual funds such as closed-end investment companies. The book provides a wealth of knowledge and is a welcome addition to my library on investing.

5 comments about Passtrak Series 7: General Securities Representative : License Exam Manual (Passtrak (Numbered)).

1. I have always wanted to study for the Series 7 exam. This review book is incredibly comprehensive, and won't stretch your bank account, or wallet! I highly recommend it for anyone who is a serious, dilligent student!



2. That should be 5 stars... Having zero financial background, I researched all the book reviews and decided to go with the book and CDrom available directly from Kaplan (purchased Dearborn). They sell their newest, second edition direct from their website as a bundle with the CDrom. I also used a book and audio CD set from "Pass The 7" (Robert Walker). I read each section from both books, then used the practice exams on Kaplan's CDrom to identify areas of weakness, and went back to re-read those topics. I listened to the audio CD's in the car constantly. I did full-length, 250 question practice exams each day for 10 days and went back to re-read areas of weakness. I studied part-time (about 2 hours a day on average) for 3 months (I have a busy life and a family) and ended up getting an 86% on the real thing in a little under 4 hours. I felt well-prepared doing it the way I did. 66% of test-takers passed in 2006 with an average score of 73%. I didn't do too badly :)



3. I have little financial background and needed to pass the test in about a month. Here is what I did with this book, the only book I have ever used.
   
   1) read the book one time. Do all the chapter tests. Understand them as best you can. Read all of the material once.
   I suggest 30-50 pages a night depending on what subject. Unfortunately the first few sections are a grind (Munis and Options are included) and take longer - make sure to read these to understanding.
   
   Pay attentin to all "test topic" alerts in the book.
   
   2) Buy the CD and take tests. Lots of tests. Lots and lots of tests. Take full section tests ( I took them in increments of 50 and 100) until you are getting 80% of them correct.
   
   At the end of each section of the book - take multiple tests on that section on the CD immediately afterwards. AS you read more and more sections - combine more and more subjects into the tests you take along with taking some that are subject specific.
   
   Take tests that include all of the subjects too - then find what sections and sub-sections you are scoring poorly on and take tests upon test of just those subjects until you know them.
   
   The CD is a must. You HAVE to have it. I probably took 150 tests ranging from full 125 all subject practice tests (that are JUST like the real thing as far as form and questions) to 50 question tests focusing on subjects I was scoring poorly on.
   
   1) study the book and do the tests in the book
   2) get the CD and go to town like a madman. Take tests until you cant take any more tests. You cannot take too many.
   
   
   I got 87 first try and finished the first 3 hour session in 50 minutes and the second 3 hour section in 1 hour and 15 minutes. Took under 2 hours total. About 30% of the questions were EXACT - the others similiar.
   
   My only complaint is that the section on Order Entry/Confirmation/and Settlement sections. I was in the 60% range on the test for that section and was LOST during the test on q's regarding those subjects.
   
   You can pass the test with a month, this book and the dearborn CD.
   
   good luck



4. Honestly, all the books out there (including this one) for the Series 7 exam are thick and filled with too much information. If you actually try to read the book from front to back, you are doing yourself a disservice. It is way too much information to retain. By the time you complete reading the book, you would have forgotten everything in the beginning.

   My advice: Skip reading the book and jump straight into doing the practice exams. Read the questions and compare it to the answer. Only use the book as a reference. Do the practice exams over and over until you have a passing score of 80%+.

   The book is actually pretty good if you insist on reading it. They explain the difficult concepts pretty well with the use of visual aids and Hotsheet summary.

   Good luck! Get plenty of rest the night before. The test is long and draining!




5. This is an excellent book. I recommend completing the book in 25 days ~30 pages per day. Get the CD and do multiple 100+ questions test. Also, the audio CDs are excellent.
   Score: 92%

2 comments about ETFs for the Long Run: What They Are, How They Work, and Simple Strategies for Successful Long-Term Investing.

1. Best ETF book ever. Anything you need to know about ETFs is in this book. Lawrence explains why they are better than mutual funds, shares the history of ETFs and explains all the tax ramifications of alternative ETFs. This book is definitely the authority on ETFs.



2. It really annoys me when a popular columnist/"qualified" expert, at least until very recently (Jeremy Siegel, for instance), is still spouting in 2009 the same old bromides that have cost many people over 50% of their savings in the last 8 months. Buy and hold, diversify, use DRIP plans, avoid load funds, buy anything with a 5-star rating from Morningstar. And, above all else, keep buying stocks. If you put the money in treasuries or bonds or the money market, even in your senior years--or so goes the familiar tale--you'll soon lose out to inflation. Rethink that: the past 6-8 months have demonstrated that you're more likely to have your head handed back to you.
   
   Look at the ten-year averages of some of the most aggressive ("especially" them) "growth" funds, even the highly-regarded ones, and don't be surprised to see that they've been trounced by bonds, the money market, CDs, even a plain old savings account. Or pay the minimum $2500 to get into some marquee stock-picker's mutual fund, and try to pretend after six months, when your investment is worth $600 while the fund is still sporting 5 stars, that it'll come back if you just hang on.
   
   The upshot of all this? Be wary of mutual funds, passive investing, buy and hold strategies. This approach simply hasn't been working, and if Japan's "lost decade" (make that 2) is any model, we could be at a stalemate for many years to come. As a result, the name of the game has suddenly become nimbleness, small and strategic investing, resisting the urge to hit home runs. But you don't have to be an expert in futures and derivatives or become a "day trader" in order to employ such a strategy. This book explains why ETF's are the best solution, and not just for the day trader (who has the time or, for that matter, the "conscience" to spend their lives trading stocks at a video terminal for 8, 10, 12 and more hours a day?) but for the long-term investor.
   
   The book is written for both the neophyte--someone who hasn't even invested in stocks let alone ETFs--as well as the experienced investor, or someone unfamiliar with the the history, structure, and future of these new investment vehicles. It's a thorough, detailed, edifying read. There may be more information here than the average person (moi, for instance) can immediately digest, but if anything has taught us the painful consequences of hastily sacking your money away in a handful of funds and forgetting about it, the past 8 months certainly have.
   
   The author not only provides a fascinating, "human" narrative of ETFs coming to market family by family, but includes the "conflict" essential to a good story. For example, Rob Arnett's introduction of "fundamental" indexing to fund portfolios becomes a shot across the bow to the "capital-weighted" indexing of John Bogle at Vanguard--a painless way for the reader to learn about controversial "efficient market" theory.
   
   Of course, most readers will want, above all, lots of practical advice. The author provides model portfolios and demystifies these relatively new investment vehicles. Following Carrel's advice and examples, any reader will be able to set up a strong portfolio and, with minimal but regular attention, stay on course toward maximizing (or preserving) profits while minimizing risk. More importantly, the investor will be able to realize not merely diversification but a sense of empowerment and control that is lacking in most mutual fund transactions. Finally, as the author explains, you're more likely to save money on sales charges, transaction fees, and tax consequences. (Many people still don't realize how inexpensive it is these days to trade a stock. When I discovered the market circa 1990, stock trades were fifty bucks and more per transaction. Even today, brokerages charge similar fees for trading mutual funds that aren't considered house funds. ETFs, on the other hand, are bought and sold just like stocks--i.e. ten bucks or even less per transaction.)
   
   This is one of the most recent studies you'll find on the subject. It understandably doesn't include developments of the last 2-3 months--many of which are mere gimmicks that don't belong in an investor's portfolio anyway, such as bear funds that triple the movement of the market in inverse order (yet for some reason, guessing right with these bear "ETFs on steroids" will not triple the investor's wealth). And in December many investors discovered that some ETFs are not necessarily as tax-efficient as they had promoted themselves to be. The author does clarify most of these matters and offers sound advice about the solid funds, the ones that the "investor" rather than the "gambler" should concerned with. (I think that it's safe to say that many of the gimmicky new products of the last couple of months are strictly for professional traders, not for investors or hedgers. If you like the psychological comfort of a hedge, short ETFs provide the opportunity. But in the long run, simply sticking with a long position and buying more on the dips could have the same balancing effect.)

5 comments about Make Money Trading: How to Build a Winning Trading Business with foreword by Toni Turner.

1. The name is a little cliche, but this book is helpful in explaining some of the basics as well as more advanced trading concepts. I enjoyed and found useful the charts that accompany the text. The tone of the book is professional but written in plain English so I could really understand the material. This is the type of book that will be referenced frequently.



2. Few books offer what the authors present in Make Money Trading. They provide a comprehensive treatment of the necessary conditions to make trading work but they take it a step further. While many authors deal in platitudes, which become tiresome as one gains experience in the market, this book gives concrete strategies that can be tested on just about any platform. Not only do they explain what a trend-following approach is vs. say a swing trading style they outline an example of each with well defined rules for entry, exit, position-sizing, etc.
   
   What is very important is that they do not treat the systems presented as "holy grails", but rather a starting point for development (simple systems, though, like the ones in this book can work extremely well). I am a systematic trader who only trades mechanically and that is why I like this book so much for anyone getting started as it underscores the importance of having a well defined plan.



3. I am a visual learner, and the illustrations/figures in the book are helpful in explaining key concepts. The book finally made evident to me the importance of understanding risk in trading. I've read over and over things like "keep your losses small, and let your runners win" but I never really understood why I could have a trading system that wins 80% of the time and still have a losing system. This book spells out the interrelatedness of profit targets, stop losses, percent profitable, average win and average loss. It provides a clear, systematic approach to system development that includes some of the realities of trading (like if it looks too good to be true on paper it most certainly will be in live trading). The book also provides several strategy examples that were really helpful to me.



4. As a medium-level trader, I thought I would learn something from this book. I was very disappointed in that it is a collection of very basic concepts. Certainly not enough to make money trading. A more appropriate title, given its emphasis on risk management would have been "Lose less money trading".



5. I am using this book as a reference quite a lot and it definitely has some good tips for newbies starting their own trading business. Highly recommended for pointing out all the things we take for granted (trading plan, money management etc) but never really follow until it is too late.

1 comments about The Rise of Mutual Funds: An Insider's View.

1. Regular readers of the business press know that mutual fund companies don't attract the breathless media coverage typically devoted to the intrepid, visionary geniuses who launch hedge funds and private equity firms. After all, everyone knows mutual funds are boring, right? They can't short stocks, can't use leverage, are heavily regulated and have to disclose all their best ideas. Why talk about common Chevrolets when you can write about mysterious Lamborghinis? To these folks, a book about the rise of mutual funds is about as enticing as one about the rise of vanilla ice cream. It won't be the first time these folks have been dead wrong.
   
   Matt Fink's book is not so much about the investment side of the fund business. That subject presumably would have been a stretch for someone whose career was spent inside the beltway. Instead, Fink provides us with a guided tour of nearly 70 years worth of public policy developments that allowed the investment side of the fund business to expand and prosper, ultimately reaching nearly two-thirds of all middle-income American households. Remarkably, Fink was a major participant in many of these developments through his work at the Washington trade group that represents mutual funds, the Investment Company Institute. Fink does not press the point, but one of this book's many quiet virtues is to demonstrate that strict government regulation that is intelligently conceived, executed and overseen can help rather than hurt financial businesses, and enhance rather than constrain the interests of individual investors.
   
   Fink does not shrink from the fact that his job was to advance the interests of mutual fund companies. Refreshingly, he also refrains from pious assertions that his industry's success in Washington was attributable to leaders who were more noble or public-spirited than others in the private sector (although some clearly were). Instead, an industry on the brink of extinction in the 1930s realized that strong and effective regulation provided an opportunity to begin remedying and rebuilding relationships with investors, many of whom had been betrayed or, at a minimum, badly served, by fund organizations in the euphoria of the late 1920s.
   
   Fink describes how the ethos that brought industry leaders together in support of comprehensive legislation in 1940 persisted over the decades and generally served fund companies, and fund investors, surprisingly well. If they didn't get it in the industry's early years, most fund leaders understand now that the success of the mutual fund business model depends entirely on individuals who are committed to long-term investing. Fink explains that this structural fact is profoundly important: that it is what aligns the interests of fund investors with those of the advisers who manage their investments, and what distinguishes mutual funds from so many other financial services and products.
   
   Mark Twain said that "prosperity is the best protector of principle." Fink recounts that the first major fund industry scandal since the New Deal followed the bursting of the tech bubble in early 2000 and the three-year bear market that followed. To his credit, however, Fink does not suggest tough market conditions or other external factors caused the abuses, and he is unsparing with respect to the industry executives directly involved. Fink's shock and disappointment is evident as he describes how the unfolding series of abuses in 2003 and 2004. In light of our current difficulties, it seems especially notable that shareholders in the funds affected by the scandal recovered 100% of their losses (which proportionally, were rather small) and that numerous executives were fired and held personally liable. Moreover, the scandal accelerated a flight to quality that has seen most of the industry's most acclaimed, shareholder-friendly firms attract new investors and significantly expanded shares of the market.
   
   Mutual funds are obviously not immune to the economic difficulties we read about and feel every day. Like many others, my family's retirement and college savings accounts have gotten clobbered. But Fink's book is a reminder that mutual funds are resilient and -- unlike the unfathomably complex products devised by the geniuses on Wall Street (at least those who are not now known as former geniuses) -- have a proven record of surviving and even flourishing through all sorts of national crises and market declines. We are keeping our faith, and our money, in mutual funds. And if you want to know why, Matt Fink's book supplies a big part of the answer.

1 comments about Find the Right Mutual Fund: Morningstar Mutual Fund Investing Workbook, Level 1.

1. The founder of Morningstar used to work as an analyst for a money management firm. He left the company to start Morningstar to provide research information about mutual funds. Because of this history, the company has a tremendous amount of knowledge on the subject of mutual funds.
   
   This book covers basic information about mutual funds such as net asset values, fund costs, taxes, investment strategies, and the fund's management. When people buy used cars, they usually have their mechanic check under the hood. This book teaches investors how to do just that but with mutual funds.
   
   According to the book, investors should ask themselves these five questions before purchasing a mutual fund:
   
   1. How has it performed?
   2. How risky has it been?
   3. What does it own?
   4. Who runs it?
   5. What does it cost?
   
   At the end of each chapter, there is a quiz and worksheet. Since the book is written by Morningstar, it references the company throughout the book. Morningstar offers subscription services to individual investors who can get access to its mutual fund research. At the end of the book, the author provides other recommended readings.
   
   - Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

2 comments about All About Mutual Funds.

1. This is a must read book for the new or old invester. I have read it 2 times and refer back to it when I want to know about a specific item that I can't remember.



2. Years of riding the market's hype-high has been replaced by this year's bitter withdrawl. How many thousands did I invest based on nothing more than a few articles written by "experts" and the all-knowing smiles of MSNBC's Squak Box? I wish I had read this book instead!

   Its sane, responsible, and time-tested approach to investing is the backbone of any sound financial body. Although my need-it-now-nature wanted to skip the well-written introductory chapters and jump to the "real" secret of investing, I came to realize that there is no "secret." There is no magic bullet. So, I went back, and started the book from the beginning, reading each page, slowly filling in the rather large gaps in my investing knowledge.

   In these unsettled times, this book feels like the calm voice of proven experience.