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Lindley Estes is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.
Gordon Murray’s “The Investment Answer” a great read
The below was this week’s Business Browser column in the FLS. For the record, I did read this book Saturday and still recommend it, especially to investment beginners. Click here for the NYT article cited below and here for a link to the book on Amazon.com.
THIS MAY BE the first and last time I’ll recommend a book without having read it.
Based on the reviews I’ve read of Gordon Murray’s “The Investment Answer,” as well as a touching article on the book in The New York Times, I feel sufficiently confident advising readers to put this one on the list.
Murray had a 25-year career on Wall Street that included stints at Lehman Brothers, Goldman Sachs and Credit Suisse First Boston. His career, like those of many in the investment community, was built around beating the markets–which many claim to do but few pull off.
Murray retired in 2001. He later met Daniel Goldie, a former professional tennis player and financial adviser, who taught him the virtues of passive investments.
While active investors try to beat the markets, passive investors are content to tie them. The irony, however, is that passive investors over time do better than the vast majority of active investors, due in large part to the excessive fees and taxes faced by people who try in vain to beat the market.
As The New York Times reported in a great article last month called “A Dying Banker’s Last Instructions,” Murray was diagnosed with terminal brain cancer in 2008. He has ceased treatment and doesn’t expect to live past the coming spring.
Murray decided to use his last days on earth to write about his new investment epiphany. His friend Goldie co-authored the 93-page paperback “The Investment Answer,” which was published in August.
According to the Times article, the book urges people to hire a financial adviser who makes no fees selling products pushed by mutual funds or insurance companies. They advise people to invest in a mix of stocks and bonds, to put at least half their stock money in foreign securities, to buy passive index funds and to re-balance periodically by selling winners and buying losers.
As the Times writer points out, those aren’t revolutionary ideas, though very few people follow them. But they’re especially poignant coming from a man whose career was built on the direct opposite, and who dedicated the remainder of his short life to convincing others of the logic of his new investment philosophy.
It looks as if the book may be a bit hard and expensive to come by in paper, but for Kindle users it’s only $6.99 and instantly available. I’ve already asked my more technologically savvy wife to order it for me on her Kindle, and have also asked her for a lesson on using the device.
The book can apparently be read in just a couple of hours, so by the time you read this column I hope to be finished with it. I would be surprised if my recommendation changes afterward.