I recommend "Debunkery" by Ken Fisher & published by Wiley.
An easy read. Fisher looks at 50 investment myths and shows why each is
BS. These are items that appear regularly in the financial press.
Disclaimer: Not a relative of Mr Fisher nor a Wiley rep.
about the book, it seems worthwhile. I do not think I will agree with> everything Fisher writes 100%, but its views sound not too distant> from Graham, Siegel and Shiller.
Paul Merriman has had Fisher in his targets for years - he's asked on
his show for any former Fisher investors to come out and tell him how
they've done. None, as far as I know, has ever piped up.
Fisher's ADV is online at AdvisorSearch. His fees start at
1.25% of assets (starting at $1,000,000 invested, though he'll
take smaller accounts at his discretion for 1.5%.)
I got some of his marketing literature sent to me a while
back, something like "The seven things you need to know!"
or whatever. Overwhelmingly, the gist of the materials
was that had one invested with his firm, one would have
been in the market on all the good days and out of the
market on all the bad days (I'm very very vaguely paraphrasing).
(He really said, with their timing, you might have missed
some of the peaks, but you'd have missed all the troughs,
too, and would ahve had a better return with less volatility -
I saw no evidence, however, that they could actually pull
that off. Come to think of it, if anyone has any proof
that anyone has ever added enough value consistently
through timing to overcome the costs, I'd love to see it).
And take a look at the Amazon page where there's the bit
about how investors in Load funds do better than investors
in no-load index funds because the load acts as a brake to
keep them from trading in and out at the wrong times. Um...
That all said, I enjoy Fisher's commentaries in Forbes and
I have no doubt he's a very bright guy. I may even read the
book. He's certainly worth paying some attention to.
Fisher's an interesting guy, but you have to read his stuff
(like most folks, I guess) with an appropriately skeptical eye.
For an alternative view, take a look at Larry Swedroe's
books. He's just come out with one called "The Quest for
Alpha", and I really enjoyed his "The only guide to alternative
snip but opinions noted
I saw the above at the Amazon site but felt there were some good
lessons to take from this, too. Like, 'if you would all stop trading
so much, you would do fine with low expense ratio, no load funds.'
After posting, I saw that Fisher's father seems to have had some
connection to Ben Graham.
Gee whiz! That is good to know! Next time, I want to be sure to pay a
5% load instead of a measly 2.5% load, because that will put a bigger,
stronger, more effective brake on my tendency to trade in and out!
Ken Fisher's father was investing legend Philip Fisher,
author of Common Stocks and Uncommon Profits. The elder
Fisher died only a few years ago at the age of 96 - still
investing until the day he died.
His work, along with Graham's, had a huge influence on
Here's a Forbes article about him:
IIRC Buffett got his "my favorite holding period is _forever_"
In fairness, if an uneducated (and ignorance can be cured!) investor
goes to an advisor, pays that advisor a load and the advisor puts him or
her into an otherwise decent load fund - and /provides advice/ - and
helps that investor stay the course, it's entirely possible that the
advisor is giving good value for what he or she is getting paid.
On the other hand, almost anyone can take the time to do a little
reading, pick a couple of low-cost no-load funds, learn to leave them
the heck alone, and probably beat that first person's performance. But
this latter person will have to do some work - and have some
discipline. Doing this well may be simple, but it's not necessarily
easy. There's a world of difference between simple and easy.
Keeping clients from trading when they shouldn't is not the
least of a decent advisor's jobs - helping provide that difficult
discipline which not everyone has without training and practice.
If you pay a 5% load, do you get twice as much advice as you get
paying a 2.5% load? In a way, that ridiculous question shows the
weakness of the argument that loads are worth it because of the
advice. We know that loads vary widely from one fund to another, but
surely the quality of advice received is not correlated with the
amount of money paid.
If a small investor invests a thousand one year in a load fund, two
thousand the next in the same fund, five thousand a few years later,
and so on, does that investor keep on getting more and more advice
over the years? If so, is it really needed? Is there any excuse at all
for having a load fund in a company retirement plan where money is
taken automatically out of salary checks? How many employees meet
regularly with someone handling a company retirement plan in order to
I do not doubt that some sales people give good advice from time to
time to inexperienced investors. But I would bet that, for the
majority of those investors, the advice is limited to an occasional
brief meeting, and in many cases the sales people are never seen again
after the first purchase.
I would guess the vast majority of serious and experienced investors
who really need advice for one reason or another deal with fee-only