The Power of Passive Investing More Wealth with Less Work

by Ferri, Richard A.; Bogle, John C.

• ISBN13: 9780470592205
• ISBN10: 0470592206
• Edition: 1st
• Format: Hardcover
• Copyright: 2010-12-07
• Publisher: Wiley

Summary

Time and time again, individual investors discover - all too late - that picking stocks is a loser's game. The alternative lies with index funds. Index funds allows investors to invest more cheaply while prospering all the more because the money saved on investment expenses stays in one's own pocket. Because index funds are diversified, investors who use them suffer less than investors who concentrate their portfolios in single asset classes, or in only a few stocks. It's Wall Street's little mentioned secret that index funds always seemed to outperform most active investment managers over the long run-by a wide margin. Ferri shows investors how easy and fun index investing is, and how successful one can be as an investor, by using simply using cost-effective index funds to allocate to stocks, bonds, and other prudent asset classes.

Author Biography

RICHARD A. FERRI is the founder of the investment firm Portfolio Solutions® and a Forbes writer. Portfolio Solutions manages nearly $1 billion in separate accounts for high-net-worth individuals, families, non-profit organizations, and corporate pension plans. Ferri has written or cowritten six investment books, including the Wiley titles The ETF Book and The Bogleheads' Guide to Retirement Planning. He earned a bachelor of science in business administration from the University of Rhode Island and a master of science in finance from Walsh College. Ferri is also a CFA Charterholder as designated by the CFA Institute, a global association of investment professionals. For more information, visit www.RickFerri.com and www.PortfolioSolutions.com.

Table of Contents

Foreword	p. vii
Preface	p. ix
Acknowledgments	p. xix
The Active Versus Passive Debate	p. 1
Framing the Debate	p. 3
Early Performance Studies	p. 15
The Birth of Index Funds	p. 33
Advances in Fund Analysis	p. 41
Passive Choices Expand	p. 61
Portfolios of Mutual Funds	p. 79
Chasing Alpha and Changing Behavior	p. 93
The Futility of Seeking Alpha	p. 95
Active and Passive Asset Allocation	p. 117
Changing Investor Behavior	p. 133
The Case for Passive Investing	p. 155
The Passive Management Process	p. 157
The Passive Case for Individual Investors	p. 175
The Passive Case for Charities and Personal Trusts	p. 193
The Passive Case for Pension Funds	p. 211
The Passive Case for Advisors	p. 221
Glossary	p. 233
Notes	p. 245
About the Author	p. 253
Index	p. 255
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