Want to weather the financial storms of life? Dollars and Common Sense helps you create a solid investment strategy to take you into next year — and beyond.
I am a firm believer that investing doesn’t need to be complex. In fact, I think that investing can be downright boring. And that’s a good thing. If you are looking for a simple investment strategy that can help you get through the tough times as well as build your portfolio in the good times, Dollars and Common Senseby Peter Andresen can be a solid resource.
One of the very first things you see in this book is the “Ten Commandments of Investing Success in the 21st Century.” The very first commandment caught my eye:
Times of economic and physical hardship are an inevitable part of life. They pass.
From that starting point, Andresen takes the reader on a logical journey through building a portfolio meant to stand the test of time. They key to building this portfolio is to first start with yourself. Andresen includes chapters on how to get your financial house in order (budget, avoid debt, save) and managing the irrationality of your own mind.
Once a foundation for smart financial decision-making is laid, he then provides this piece of advice: Invest only in mutual funds. I like this guy already. I’m a huge fan of low-cost index funds (and I like low-cost ETFs as well).
After establishing that simple approach to investing, Andresen goes on to help you see how you can build a portfolio using mutual funds, including bond funds, stock market funds, international mutual funds, and more. He presents practical and doable strategies that almost anyone can use to begin building an investment portfolio.
Now that you have some solid examples of different types of portfolios — including those that come with varying degrees of risk — Andresen offers more helpful hints on managing your investment portfolio. There is information on rebalancing, and as well as an emphasis on patience and consistency as you invest for the future. The book includes a glossary at the end, as well as an appendix that includes helpful hints on choosing an investment advisor. You can also benefit from the included reading list.
I really enjoyed this book. It takes you, step by step, through the process of preparing yourself as an investor, and includes information that can help you prepare for what might be coming later. There is no reason to avoid investing when you have this helpful resource.