Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns And Long Term Investment Strategies | 
 enlarge | Author: Jeremy Siegel
Publisher: McGraw-Hill
Category: Book
List Price: $34.95
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Rating:  5 reviews
Sales Rank: 4923
Media: Hardcover
Edition: 4
Pages: 436
Number Of Items: 1
Shipping Weight (lbs): 2.1
Dimensions (in): 9.3 x 7.6 x 1.5
ISBN: 0071494707
Dewey Decimal Number: 332.6322
EAN: 9780071494700
ASIN: 0071494707
Publication Date: November 27, 2007
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Shipping: International shipping available
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Product Description
Stocks for the Long Run set a precedent as the most complete and irrefutable case for stock market investment ever written. Now, this bible for long-term investing continues its tradition with a fourth edition featuring updated, revised, and new material that will keep you competitive in the global market and up-to-date on the latest index instruments. . . Wharton School professor Jeremy Siegel provides a potent mix of new evidence, research, and analysis supporting his key strategies for amassing a solid portfolio with enhanced returns and reduced risk. In a seamless narrative that incorporates the historical record of the markets with the realities of today's investing environment, the fourth edition features: . . - A new chapter on globalization that documents how the emerging world will soon overtake the developed world and how it impacts the global economy.
- An extended chapter on indexing that includes fundamentally weighted indexes, which have historically offered better returns and lower volatility than their capitalization-weighted counterparts.
- Insightful analysis on what moves the market and how little we know about the sources of big market changes.
- A sobering look at behavioral finance and the psychological factors that can lead investors to make irrational investment decisions.
. . A major highlight of this new edition of Stocks for the Long Run is the chapter on global investing. With the U.S. stock market currently holding less than half of the world's equity capitalization, it's important for investors to diversify abroad. This updated edition shows you how to create an �efficient portfolio� that best balances asset allocation in domestic and foreign markets and provides thorough coverage on sector allocation across the globe. . Stocks for the Long Run is essential reading for every investor and advisor who wants to fully understand the market-including its behavior, past trends, and future influences-in order to develop a prosperous long-term portfolio that is both safe and secure. .
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A New Gloss on Stocks for the Long Run August 27, 2008
Great Faulkner's Ghost (Washington, DC)
5 out of 6 found this review helpful
In the previous editions of Stocks for the Long Run, Wharton Finance professor Jeremy Siegel offered a thoroughly bullish take on the merits of equity investing that has proved highly influential and largely correct through the end of the post-Millennial Bull Market in mid-2007. In the latest edition of this classic, released in a much more difficult period of substantial market declines, Siegel has added important and more nuanced insights derived from his previous and somewhat overlooked book "The Future for Investors," which came out in 2006. Siegel's basic advice to stock investors is to focus less on growth stocks and index mutual funds (eg., Vanguard 500) and more on looking for tried and true stocks that pay high dividends. He argues that such reinvested dividends are the true source of stock returns, or the "El Dorado." (His term). Overall, this argument is well-presented and persuasive.
However, I am perplexed on a key element. His case is largely based on historical evidence that purports to show that high dividend yield stocks, with dividends reinvested, have accumulated more total return than growth stocks or index mutual funds. However, his calculations do not account for the deleterious effect of taxes on reinvested dividend. (He says in an endnote that taxes are not significant for the portfolios he chose, but does not explain why; for most common stock portfolios, taxes are significant.) Dividends are taxed yearly and until recently at a higher rate than that of capital gains and that of retained earnings, which are not taxed at all. If taxes have been paid on dividends, only the untaxed part can truly be considered "reinvested"; the part that is taxed has to be made up by a new infusions of cash from the investor. The effect of ignoring this is that his historical comparisons are not terribly meaningful because he is not calculating the returns on true (after tax) contributions to dividend stocks vs. growth stocks. Naturally, if more is contributed to the dividend stocks, there is likely to be more at the end. (BTW, this is basically the same fallacy that sunk the allegedly huge returns of the otherwise delightful "Beardstown Ladies" of yore.) Given that the magnitude of the "advantage" he posits of dividend stocks vs. growth stocks is not all that great, one cannot have confidence that he has truly made his case.
That said, his advice is very useful for investors in tax sheltered 401Ks. Also, the new lower tax rate on dividends also helps lessen, though not eliminate, the effects of yearly taxation of dividends.
In addition to emphasizing the importance of the contribution of stock dividends to equity portfolio performance, this book also grapples with a perplexing challenge to Siegel's original stocks for the long run mantra, the much vexed question of what will happen if and when the populous Baby Boom generation attempts to cash in its stock and bond retirement portfolios by selling them to the smaller demographic of Gen X and Gen Y. An entire school of catastrophe futurologists, most notably Harry Dent, but also more mainstream voices like Peter G. Peterson (The Grey Wave) have warned that this so-called Age Wave is about to wreak havoc with stock market investments. In this book, Siegel does not dismiss this issue, but deals with it in a logical and generally less alarmist point of view. At the risk of oversimplifying a complex analysis, Siegel's bottom line is that while it is true that there are not enough younger generation Americans to absorb the Boomers stock and bond assets at current prices, investors in emerging countries, like China and India, will more than make up for that and will end up buying the Baby Boomer's paper assets as the Boomers sell them off to fund their retirements. The upshot is that foreigners will end up owning a lot of our companies by the year 2050. A potential snag, says Siegel, is whether America will be willing to let this happen, or will pass laws or adopt polices to discourage the transfer of US assets to foreign countries. This remains to be seen, but he is optimistic. On the other hand, the implications for the typical Baby Boomer's most important asset, his or her house, is rather dire, because homes can't be sold as readily to foreigners, for obvious reasons. Siegel doesn't provide an answer for the housing market, which is outside the scope of a book on stock investing in any event. Overall, this remains one of the best written and most sensible investment books available today, now offering a more nuanced and even more helpful sets of advice than the previous editions. With new information and analysis, this is well worth owning, even if you have a previous edition.
Outstanding Overview of Stock Investing April 24, 2008
F. Tromans
4 out of 5 found this review helpful
Dr. Siegel, one of the top academics in finance, has provided a comprehensive, up-to-date overview of investing in stocks. His book is based on data going back 200 years and is fact based, rather than just opinions or theories. I have been involved in investing for over 30 years and found much new, useful information. This book is a great read for anyone interested in stock investing, whether a rookie or a veteran.
Professor Siegel gets an A+ April 22, 2008
FOREX TRADER (PROVENCE, FRANCE)
3 out of 6 found this review helpful
Siegel's masterpiece is a must buy for anyone who wants to stop wasting money on mutual fund fees and start accumulating wealth. I give this book and Professor Siegel an A+.
Andrew Nissenbaum
The environment map to help you move in ANY stock market March 16, 2008
Li Heng Mei (Rio de Janeiro, Brazil)
6 out of 8 found this review helpful
Recently published (end of 2007) very helpful to give an overall view of the world stock markets, with enphasis on the american market of course. In my opinion it gives a helicopter view of the economy and the stock market movements and in doing so it provides you with a map of the "territory" you are moving in (as it were). Great statistic amount of information.
Excellent Investment Guide January 26, 2008
Jerome Scanlan (Washington, DC)
14 out of 29 found this review helpful
This is much improved from the first and second editions. (I didn't read the third edition and may not have read all of the second.) The book contains a lot of useful information, presented, for the most part, clearly, and Siegel's commentary on the factual material he has compiled incorporates up to date research. The book can be read as a (slightly to moderately advanced) investment guide rather than just a compendium of reasons to chose stocks over other investments (or at least over fixed income investments). To his credit, Siegel has learned a lot about investing since the first edition.
Although this point is not made in the book, market indexes definitely can be beaten through the careful selection of actively managed mutual funds -- requiring only (first) reading a broad selection of books on investing, subscribing to and reading Morningstar, and reading fund prospectuses and reports. (This may seem like a lot of work, but most of the time is spent upfront and at your own pace; and considering how long your money will be invested, the lifetime effort is minimal. A corollary to this approach is that a nonprofessional investor should never buy individual stocks. This not only will take more time than most people can afford, but for almost everyone will result in at best (assuming infrequent trading) the market return with a lot more risk.) Those, including many prominent economists, who believe it is impossible to identify funds that will outperform the market in the future are just wrong. Past performance can predict future success in investing as in most other endeavors. Admittedly, there is a theoretical basis -- the efficient markets hypothesis -- for contending that stock market investing is qualitatively different from, say, chess playing, but ascribing the results of the many long-term successful investors to luck or excess (and lucky) risk taking seems to me more an act of faith than reason. Finally, the beauty of investing through open-ended mutual funds is that unlike stocks, which generally are priced efficiently, a fund's price is not affected by its demand. Thus, you can buy the best at the same price as the worst -- i.e., the current market value of the stocks the fund owns. (It is true that as the better performing funds accumulate more assets their ability to execute their strategies can be affected, but responsible funds attempt to mitigate this situation by closing, sometimes even to current investors.)
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