Book Review and Giveaway: The Intelligent Portfolio

The books keep rolling in! It’s getting challenging trying to keep up with the book reading/reporting between all my other duties. However, since the readers seem to enjoy them (or maybe it’s the giveaways), I will keep doing them!

This hardcover book is about investing, portfolio creation and risk management. It’s titled “The Intelligent Portfolio – Practical Wisdom on Personal Investing from Financial Engines” written by Christopher L. Jones. The book is fairly lengthy and technical, but the beauty lies in the summary at the end of each chapter.

Who is the Author?

According to the publisher:

Christopher L. Jones is Chief Investment Officer and Executive Vice President of Investment Management for Financial Engines. Working closely with founder William F. Sharpe, Jones built and led the team of experts in finance, economics, and mathematics that developed the financial methodology for Financial Engines’ personalized investment advice and management services. Jones has led the investment management function at Financial Engines for more than a decade. He holds an MS in business technology, an MS in engineering-economic systems, and a BA in quantitative economics, all from Stanford University.

What Topics are Covered?

  • Recognizing the link between risk and reward
  • Leveraging the wisdom of the market
  • Minimizing losses due to investment fees
  • Avoiding the risks of stock picking
  • Selecting funds with proper forward-looking criteria
  • Understanding how to realistically fund financial goals
  • Investing tax-efficiently

Important Lessons

  • The most important diversification is the split between stocks/bonds, then between domestic/international equity.
  • Minimizing your investment expenses will result in a huge difference in portfolio value over the long term.
  • Higher expected returns will have a higher risk associated with them. However, not all high risk investments come with higher expected returns.
  • The most important factors in choosing a risk level are the tolerance for downside outcomes and the time horizon before the money is needed.
  • Investing in individual stocks are an unnecessary gamble. Historically, investors do better with diversified instruments like ETF’s/index mutual funds.

Final Thoughts

I enjoyed this hardcover book as it provides a lot of insight into the value of diversified low cost index investing through facts and hard earned experience. I would say that this book is geared towards investors who are already familiar with the markets but looking to expand their market knowledge.

For the beginner investor, this book may be a little intimidating and a touch on the dry side as it is fairly technical. However, I would say that this book would provide the right start on how to create a diversified portfolio at a risk level that is right for you.

Want a Free Copy?

  • Simply leave a comment and you’ll automatically be entered in the draw for a free copy.
  • Please only 1 comment entry / person (please enter a valid email address).
  • Only those with a North American mailing address may enter (publisher rules, sorry).
  • Contest will end Thursday 5pm EST June 12, 2008 and the winner announced shortly afterwards!

Find out how you can save an additional 4% on this book from Chapters.

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FT

FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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Matt T
13 years ago

Looks like a good one, love to read!

Todd
13 years ago

count me in too!

Stephen Oakes
13 years ago

The best thing you can do as an investor is to read as many books out there like this one. It’s important to learn what your investment style is.

Once you learn and understand the basics, draft up a strategy and test it. If it’s successful, use it as your base and continue to tweak, perfect, or create new strategies that could provide higher returns at a reduced risk level.

But more importantly, use a stop-loss you’re comfortable with to protect you in the event unforseen market forces go against your position.

These are general tips I realize, but very crucial in building an investment foundation with which you can fill the gaps and learn how make money.

-S

Kyle
13 years ago

I have never heard of Christopher Jones, but put his name next to Will Sharpe and I’m sold! Beginner investment books are a dime a dozen these days, but a solid guide for advanced investors is rare. I look forward to reading it.

Matt V
13 years ago

I’m in! Great site…

Colleen
13 years ago

I appreciate your effort on this blog. Love it!

Quick Lunar Cop
13 years ago

Please count me in! I haven’t read this one yet!

RI
13 years ago

Sign me up! Is there any discussion of asset allocation?

Denny
13 years ago

Please include me in the draw!

Thanks kindly!

telefantastik
13 years ago

i’m in! thx