The Big Investment Lie What Your Financial Advisor Doesn't Want You to Know

by Edesess, Michael

• ISBN13: 9781576754078
• ISBN10: 1576754073
• Format: Hardcover
• Copyright: 2007-01-14
• Publisher: Berrett-Koehler Publishers

Summary

Michael Edesess, founding partner and former chief economist of the Lockwood Financial Group, blows the whistle on the financial services industry and the big investment lie: professional investors cannot beat market averages! He offers rock-solid guidelines to achieve the best possible financial future with his "Ten New Commandments for Smarter Investing."

Author Biography

MICHAEL EDESESS is an accomplished mathematician and economist with experience in the investment, energy, environment, and sustainable development fields. He was a founding partner in 1994 and chief economist of the Lockwood Financial Group until its sale to the Bank of New York in September 2002. Previously an independent consultant to institutional investors, his clients included several of the largest investment banking and consulting firms. His areas of expertise cover the range of applications of mathematics to investments, including performance and risk measurement; Monte Carlo methods for asset-liability, asset allocation, and pension planning models; dynamic hedging using futures and options; effective style mix determination; backtesting; and quadratic portfolio mean-variance optimization. Dr. Edesess has spoken at conferences on investment research and taught courses in international finance, economics, mathematics, statistics, systems analysis, and environmental policy at four universities. He has been published in the Wall Street Journal and the Journal of Portfolio Management and has been interviewed on CNBC.

Table of Contents

Preface	p. ix
Introduction: Excuse Me, Is This the "Real" World?	p. 1
How Much You Pay	p. 7
The Beardstown Ladies versus the Professionals	p. 9
The Extraordinarily High Cost of Investment Advice	p. 23
The Outer Limits: Hedge Fund Fees	p. 39
Taxes Down the Drain	p. 51
Why Do We Give Golden Crumbs to Rich People?	p. 61
How Little You Get	p. 71
Why Investment Professionals Can't Predict Markets	p. 73
The Abject Failure of Professional Advisors and Managers	p. 87
The Market Can Turn on a Dime	p. 105
The Claims of Money Managers: "Smoking Our Brand Prevents Cancer"	p. 115
Idle, Greedy Hands and Too Much Data Do the Devil's Work	p. 127
The Simple Rules of Nobel Prize Winners	p. 141
There's No Such Thing as a Free Lunch	p. 149
Investment Genius or the Thousandth Coin?	p. 159
How You Are Sold	p. 169
Effective Pitches to Sell the Big Lie	p. 171
How Investors Delude Themselves	p. 185
How Hedge Funds Operate and Are Sold	p. 197
How Consultants and Money Managers Sell to Institutional Investors	p. 213
Derivatives: The Good, the Bad, and the Ugly	p. 225
The Modern Slippery Slope of Business Ethics	p. 239
Conclusion: The Ten New Commandments for Smart Investing	p. 253
Notes	p. 263
Glossary	p. 271
Bibliography	p. 283
Index	p. 287
About the Author	p. 297
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