Investing without Wall Street: The Five Essentials of Financial Freedom

Book description

Praise for Sheldon Jacobs

"Sheldon Jacobs is a level-headed gentleman who is a cross between Albert Einstein, the Dalai Lama, and Vanguard founder Jack Bogle and who had a solid record editing and publishing The No-Load Fund Investor financial newsletter for over a quarter-century."


"King of no-loads."

Investor's Business Daily

"Dean of the no-load fund watchers."

USA Today

"Among financial experts who are able to think with a small investor's perspective, no one is more level-headed than Sheldon Jacobs."

Bottom Line/Personal

In July of 1993, Sheldon Jacobs was one of five nationally recognized mutual fund advisors chosen by The New York Times for a mutual fund portfolio competition. The portfolio that he selected produced the highest return of all contestants for almost seven years, and the Times quarterly publication of this contest helped him become one of the best-known mutual fund advisorsin America.

Investing without Wall Street shows investors how to achieve the greatest wealth with the least effort. It details the five essentials that even a kid could master and shows that they are all you need to be a successful investor. With this knowledge, the average investor can invest on his or her own and make $252,000 more than a person investing the same way who shares his or her profits with professionals. This book will teach you how.

Table of contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Dedication
  5. Also by Sheldon Jacobs
  6. Contents
  7. Preface
    1. Today's Times Call for More Conservative Strategies
    2. Sheldon Jacobs' Statement of Purpose
    3. My Approach to Financial Profits
    4. The Five Essentials
  8. Introduction: Take a Journey with Me
    1. How My Journey Began
    2. New York, New York
    1. CHAPTER 1: The First Essential: Determine the Right Asset Allocation
      1. The Basics
      2. Learn from the Big Boys
      3. How the Ancients Allocated Their Wealth
      4. Your Most Important Task: Determining the Best Asset Allocation for You
      5. Important Lessons in This Chapter
    2. CHAPTER 2: The Second Essential: Diversify within Asset Classes
      1. Diversify Stocks with Broad-Based Index Funds
      2. Defining “Broad-Based”
      3. Forget Style Diversification
      4. It's Hard to Forecast Styles
      5. The Solution
      6. How Many Funds Do You Need?
      7. Do Individual Stocks Have a Place in Your Portfolio? I Say No
      8. Why the Fixation on Individual Stocks?
      9. I Buy a Stock
      10. Important Lessons in This Chapter
    3. CHAPTER 3: The Third Essential: Understand and Control Risk
      1. Measuring Risk
      2. Betas Are the Most Common Way to Measure Risk
      3. Managing Risk through Asset Allocation
      4. Five Levels of Risk
      5. Important Lesson in This Chapter
    4. CHAPTER 4: The Fourth Essential: Keep Your Costs Low
      1. A 40-Year Comparison between Do-It-Yourselfers and Pay-a-Guy (PAG) Types
      2. The Difference between Load and No-Load Funds
      3. Avoid Taxes as Much as Possible
      4. Important Lesson in This Chapter
    5. CHAPTER 5: The Fifth Essential: Choose the Right Financial Media to Follow
      1. Where's the Best Place to Get Financial Advice? A Poll
      2. Important Lessons in Part One
    1. CHAPTER 6: Developing Media Expertise
      1. Listening to Individuals May Be Hazardous to Your Wealth
      2. The Press Lacks Numeracy
      3. Be Aware of Press Biases
      4. The Hierarchy of Investing Knowledge
      5. Going Beyond Media Recommendations
      6. The Perils of Perma Bulls and Bears
      7. Avoiding Unhelpful Advice
      8. Read About Scams
      9. How to Game Contests
      10. The Selling Advice Myth
      11. Investing Seminars Worth Attending
      12. Important Lessons in This Chapter
    2. CHAPTER 7: How to Build Mutual Fund Portfolios for Lifetime Profits
      1. Lifetime All-Index Fund Portfolio
      2. Important Lessons in This Chapter
    3. CHAPTER 8: Index Fund Investing: Beyond the S&P 500
      1. Indexing—Yes; Market Cap-Weighted Indexes—Not Necessarily
      2. The Equal-Weight Alternative
      3. The Fundamental Indexation Alternative
      4. Fundamental Weighting Doesn't Win Every Time
      5. Which Is Best Over the Long Run?
      6. Some Fundamental Index Fund Choices
      7. Important Lessons in This Chapter
    4. CHAPTER 9: How to Survive Bear Markets
      1. Too Little, Too Late
      2. Adopt a Conservative Asset Allocation
      3. How to Protect Yourself from the Next Crash
      4. Important Lessons in This Chapter
    5. CHAPTER 10: The Case for Market Timing
      1. Buy and Hold—Not What It Used to Be
      2. Market Timing Doesn't Work, So Why Do So Many People Listen to Market Timers?
      3. Where Are We in the Cycle?
      4. How to Use a Timer
      5. Criteria for Hiring a Market Timer
      6. Rebalancing: A Form of Market Timing
      7. Tactical Asset Allocation: Another Form of Market Timing
      8. Strategizing Fund Distributions
      9. Mutual Funds Don't Market Time
      10. Charts, Schmarts; You Have Facts
      11. Stop-Lossing Stocks and Mutual Funds
      12. Important Lessons in This Chapter
    6. CHAPTER 11: The No-Work Way to a Comfortable Retirement . . . Maybe
      1. How to Invest without Paying Attention
      2. TDF Alternatives
      3. Important Lessons in This Chapter
    7. CHAPTER 12: Dealing with Professionals
      1. Bert Jacobs' Story
      2. Cold-Calling Brokers
      3. Lessons from the Madoff Mayhem
      4. How to Reduce the Chances of Being Scammed
      5. Do You Fit the Victim Profile?
      6. Advice for Those Who Have Been Taken
      7. Independent Financial Advisors
      8. What to Look for When Choosing an Advisor
      9. Important Lessons in This Chapter
    1. CHAPTER 13: For Clearer Thinking
      1. Clear Thinking Quiz
      2. Correlation Is Not Causation
      3. Are Patterns Projectable?
      4. Some Correlations Make Sense
      5. Why Averages Can Be Misleading
      6. The Best Six Months
      7. The Fallacy of Missing the Best Days
      8. Do You Benchmark Your Performance?
      9. Rules of Thumb
      10. Know What You Don't Know
      11. Know What Is Unknowable
      12. And Know What Your Advisors Don't Know
      13. The Difference between Investing and Speculating
      14. Answers to the Clear Thinking Quiz
      15. Important Lessons in This Chapter
    2. CHAPTER 14: The Psychology of Investing
      1. Anchoring
      2. Randomness in the Markets
      3. Boldness
      4. Don't Gravitate Toward Round Numbers
      5. Being Too Comfortable
      6. Myopia
      7. Playing with the House's Money
      8. Buying High and Selling Low
      9. Bull versus Bear Market Behavior
      10. Why Employees Overweight Their Own Company Shares
      11. What Are Others Thinking?
      12. Greed
      13. Important Lessons in This Chapter
    3. CHAPTER 15: Integrity, or the Lack of It
      1. How the ICI Fought the Banks—and Won
      2. The Mutual Fund “Market Timing” Scandal
      3. John Bogle
      4. Mark Hulbert
      5. Chuck Schwab
      6. Robert L. Rodriguez
      7. Integrity in the Media
      8. How to Go from Best to Worst in Five Years
      9. I Don't Know
      10. I Was Wrong
      11. Important Lessons in This Chapter
    4. CHAPTER 16: Women Aren't Different; They Just Live Longer
      1. Profiles in Success
      2. Important Lessons in This Chapter
    5. CHAPTER 17: Adventures in Collectibles
      1. Why I No Longer Collect Stamps
      2. I Love Art
      3. Important Lessons in This Chapter
    6. CHAPTER 18: Vanity Investments
      1. How to Invest in a Broadway Show without Having to Mortgage Your House
      2. Don't Invest in Anything That Eats
      3. Important Lesson in This Chapter
    7. CHAPTER 19: Increasing Your Workplace Income
      1. Own Your Own Business
      2. Don't Leave Your Business to Your Children
      3. Really Going Your Own Way
      4. Advice from Jonathan Clements
      5. Die Broke
      6. Important Lessons in This Chapter
  12. Epilogue: Journey's End
  13. Appendix: Directory of Newsletters with Model Portfolios
  14. Glossary
  15. Acknowledgments
    1. Frederick Pierce
  16. About the Author
  17. Index

Product information

  • Title: Investing without Wall Street: The Five Essentials of Financial Freedom
  • Author(s):
  • Release date: April 2012
  • Publisher(s): Wiley
  • ISBN: 9781118204641