The Coffeehouse Investor

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1. scary-sizeFeb 2022
   The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street and Get on with Your Life by Bill Schultheis. Short concise, actionable advice.
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2. jseligerMay 2010
   I was just going to say almost exactly this. The problem is that your financial advisor's purpose is probably to make money, which he or she probably does most efficiently by separating you from yours through fees. A few minutes ago I recommended the book The Millionaire Next Door, which points out how fees can quickly kill your returns, which can't beat the market over time anyway.

   You have a major principle-agent problem with financial advisers, and that's why I suspect many are better off without, especially if they can find an investment column in a newspaper or something like that. Years ago I read a guy named "The Coffeehouse Investor," which helped me enormously, as did the books I recommended previously.

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3. gcvJul 2008
   For the shortest introduction to sensible, index-based investing, read The Coffeehouse Investor (Bill Schultheis). It shouldn't take more than an hour or two to go through, and it contains all the basics. Then, if you're interested in a more in-depth analysis of the same thing, read A Random Walk Down Wall Street (Burton Malkiel), as suggested by several others in this thread.
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4. epostsJul 2008
   Here is a good list: http://www.bogleheads.org/readbooks.htm

   General Investing

   # The Four Pillars of Investing - by William ("Bill") Bernstein.

   # Wise Investing Made Simple or The Only Guide to a Winning Investment Strategy You'll Ever Need - by Larry Swedroe

   # The Bogleheads' Guide to Investing - by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf

   # All About Asset Allocation - by Rick Ferri

   # The Informed Investor - by Frank Armstrong

   # The Little Book of Common Sense Investing - by John "Jack" Bogle

   # The Coffeehouse Investor - by Bill Schultheis.

   Investor Behavior

   # Why Smart People Make Big Money Mistakes And How To Correct Them - by Gary Belsky and Thomas Gilovich

   # Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich - by Jason Zweig

   # Rational Investing in Irrational Times: How to Avoid the Costly Mistakes Even Smart People Make Today - by Larry Swedroe

   Financial History

   # Against the Gods and Capital Ideas - by Peter L. Bernstein

   # Devil Take the Hindmost: A History of Financial Speculation - by Edward Chancellor

   # A Random Walk Down Wall Street - by Burton Malkiel

   Like others here have mentioned, http://www.bogleheads.org/ is a great forum for Vanguard investors.

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5. gcvMay 2008
   Two recommendations for reading: A Random Walk Down Wall Street (mentioned in another post, long, detailed, and entertaining), and The Coffeehouse Investor (short and funny). Both lay out the principles behind the theory of efficient markets, and make a great case for it.

   In a nutshell: buy the cheapest unmanaged index funds you can find. Come up with an allocation you're comfortable with (e.g., 50% large cap, 20% mid-cap, 20% small-cap, 10% international equity). Reallocate once a year so that your investments still follow the same rough percentages; that way you won't have more risk exposure to any particular asset class just because it happened to have done well or poorly in any given year. That's it. You will not outperform the market by picking your own investments or playing hedging games with derivatives, and, over the medium-to-long term, neither will any fund manager. Since you're in this for the long term, have fun in life and don't bother checking your balances except when you get your quarterly statements.

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