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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.

If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).

88 Comments

  1. Farhan Thawar on June 10, 2008 at 8:50 am

    Looks interesting, however I’d rather read a book that also spoke of the Canadian market.



  2. Doug Weber on June 10, 2008 at 9:26 am

    Interesting review. I would love a free copy and I do have a N. American address! Let me know if you select me and Thanks for keeping up with the reading and posting the information!



  3. Joshua on June 10, 2008 at 9:39 am

    Sign me up for the big W! This book looks like a very fascinating read!



  4. Pierre-Hugues on June 10, 2008 at 9:49 am

    I was just looking for some more advice on how to start creating a portfolio. Looks like an interesting read.



  5. Aaron on June 10, 2008 at 9:57 am

    Excellent. I love these contests! Thanks again FrugalTrader.



  6. Laura on June 10, 2008 at 9:58 am

    Sounds like a great book!



  7. chris on June 10, 2008 at 10:16 am

    sign me up.



  8. Telly on June 10, 2008 at 10:31 am

    I like winning!



  9. Joe on June 10, 2008 at 10:43 am

    Thanks for the contest! Sign me up.



  10. Finance_Addict on June 10, 2008 at 10:44 am

    Here is my post.



  11. Judy on June 10, 2008 at 11:03 am

    Sounds like a great read – Tks Judy



  12. David on June 10, 2008 at 11:03 am

    A book about the strength of index investing, that sounds very good!



  13. Bob on June 10, 2008 at 11:03 am

    Sounds like an interesting read.



  14. Dividend Growth Investor on June 10, 2008 at 11:05 am

    Pick me, pick me :-)



  15. Greg on June 10, 2008 at 11:11 am

    Always want to learn more! Sign me up for the draw!



  16. Millionaireby45 on June 10, 2008 at 11:34 am

    Sounds like a great book. You can never have too much knowledge especially when it comes to investing.



  17. Christopher on June 10, 2008 at 11:35 am

    sounds like it would be a fairly interesting read.



  18. Luc on June 10, 2008 at 11:40 am

    Sounds like a good read,



  19. JME on June 10, 2008 at 11:40 am

    I would love to win the book



  20. ryan on June 10, 2008 at 11:44 am

    i would like to see how this differs from the other investment books i have read.



  21. Marianne O on June 10, 2008 at 11:53 am

    Time for me to level up from beginner to high-beginner books, as we’re just setting up self-directed RRSPs. This sounds like a useful book at this point in our financial journey.

    Thanks for the review.



  22. Oscar on June 10, 2008 at 11:55 am

    Thanks for the book..
    Oscar



  23. Chuck on June 10, 2008 at 11:58 am

    Here’s my entry!



  24. James on June 10, 2008 at 11:59 am

    Seems like an interesting read. And the price is right!



  25. MAC on June 10, 2008 at 12:01 pm

    thnaks for the book review. Hope to win it
    MAC



  26. Andre on June 10, 2008 at 12:03 pm

    Sounds like an interesting read



  27. Blitzkrieg on June 10, 2008 at 12:05 pm

    I’m in.



  28. Mark on June 10, 2008 at 12:07 pm

    I like these investing books that have a mathematical basis to the theories.

    Does it also show how to recognise when a higher risk investment won’t come with higher returns?



  29. Jim on June 10, 2008 at 12:08 pm

    Pick me for the free book! This could be a good read!



  30. Susie on June 10, 2008 at 12:21 pm

    Love to learn…and I must say that I really enjoy your site. I have learned a lot and like the simple easy format. I look forward to my read every day. Thank you, FG



  31. paulette on June 10, 2008 at 12:26 pm

    Nice book! Too bad for me im not qualified to join:(



  32. Commander T on June 10, 2008 at 12:27 pm

    I am interested in this book.



  33. Yuriy on June 10, 2008 at 12:35 pm

    Please, count me in. I would love to read something serious on the topic.



  34. Jane on June 10, 2008 at 12:46 pm

    An intelligent portfolio? Count me in for the drawing!



  35. Terri on June 10, 2008 at 1:12 pm

    Thanks for the review! I hope you pick me! :)



  36. Daniel on June 10, 2008 at 1:20 pm

    Would saying that it’s my birthday tomorrow help me win? Did not think so. :-)



  37. FearLES on June 10, 2008 at 1:22 pm

    Thanxs for the review. Good luck to everyone.



  38. Michael Gillard on June 10, 2008 at 1:24 pm

    Looks good. Mine could certainly use some sprucing up!



  39. ETF Income on June 10, 2008 at 1:27 pm

    I am in, thanks.



  40. Sean on June 10, 2008 at 1:27 pm

    I’m feeling lucky!



  41. talcumboy on June 10, 2008 at 1:33 pm

    Sign me up :).



  42. Isabelle on June 10, 2008 at 1:35 pm

    This book sounds like what I need.



  43. Jeremy on June 10, 2008 at 1:38 pm

    Book? I’d love it!



  44. Stephen Winters on June 10, 2008 at 2:03 pm

    Another very interesting book read from a very interesting site.
    When are you going to be writing your own book FT?



  45. Doug on June 10, 2008 at 2:03 pm

    I would love a free copy, thanks for the chance…



  46. Returns Reaper on June 10, 2008 at 2:05 pm

    Sounds like a good book. I like the sounds of a book with a heavier technical weighting. Often I find books tend to shy away from the technical side of things to appeal to a larger audience. This makes it hard to find good material if you are interested in those details.

    Sign me up for the draw, please!



  47. Nick on June 10, 2008 at 2:18 pm

    Sounds like an interesting read; especially about choosing ETFs over individual stocks.



  48. Jordan Clark on June 10, 2008 at 2:31 pm

    Frugal,

    Has this book on portfolio creation changed any of your views on using a couch potato style portfolio?

    Please put me in for the draw.

    Jordan



  49. pablo9567 on June 10, 2008 at 2:32 pm

    If you own stocks then you can’t afford to get news later than everyone else. Try easystockalerts.com for a week and you’ll see what I mean. There is no fee and no spam…so make money now and sign up for easystockalerts.com



  50. tom on June 10, 2008 at 2:41 pm

    Hope foreign markets are sufficiently addressed!



  51. Ringo on June 10, 2008 at 2:55 pm

    The contents of the book seem so interesting so it would be great if I can have a chance to read it through.



  52. Kassam on June 10, 2008 at 3:09 pm

    I’m in!



  53. gS49 on June 10, 2008 at 3:15 pm

    I’ll take it!



  54. Jesus on June 10, 2008 at 3:17 pm

    Count me in!!



  55. Alex Muchortow on June 10, 2008 at 4:09 pm

    Sounds like a good refresher to keep my investing on track



  56. Nate on June 10, 2008 at 4:31 pm

    Entering the contest.



  57. supersocco on June 10, 2008 at 5:01 pm

    I am going to be a DIY investor, so this is right up my alley



  58. Andrew on June 10, 2008 at 5:12 pm

    Sounds like an interesting book. Please put me in for the draw.



  59. Rob on June 10, 2008 at 5:40 pm

    Im in!



  60. Kevin on June 10, 2008 at 6:13 pm

    I’m always interest in info on ETFs



  61. Chris on June 10, 2008 at 6:35 pm

    The book sounds great. Sign me up!



  62. Kenny on June 10, 2008 at 7:18 pm

    Sounds interesting…



  63. newinvestor on June 10, 2008 at 7:44 pm

    Sign me up please



  64. Elvis K on June 10, 2008 at 7:58 pm

    Elvis is in the building lol.

    Sign me up!



  65. Patrick on June 10, 2008 at 8:10 pm

    I’d be interested to see how they reconcile the every-percentage-point-counts philosophy with the advice to diversify between stocks and bonds. If you’re not using your savings for a decade or two, what good are bonds?



  66. Cash Canuck on June 10, 2008 at 9:24 pm

    Wow! Everyone loves a giveaway. Including me!

    I like books that aren’t afraid to throw some technical information at you. When I have a methodology to chew on, I can apply the writers’ systems to my own list of investments and see how closely I fit in.

    The whole idea about asset allocation, and ETF index investing seems like it fits in well with the popular investing mantra of the day (at least in the PF blogosphere), so it would be interesting what new material is brought to the table with this publication.

    Cheers!



  67. cashinstinct on June 10, 2008 at 9:31 pm

    I am interested by this book!

    Thanks for giving it to one of your reader.



  68. AndrewP on June 10, 2008 at 10:41 pm

    I’d love to read THIS book!



  69. Warren on June 10, 2008 at 11:13 pm

    Wish me luck.



  70. Jim on June 10, 2008 at 11:39 pm

    sign me up



  71. B on June 10, 2008 at 11:40 pm

    Looks interesting… especially for the individual investor.



  72. Debt_Free_in_5 on June 11, 2008 at 12:03 am

    Count me in



  73. john sanderson on June 11, 2008 at 12:30 am

    First post here, although I’ve been reading with interest since the first of the year.

    Thanks for all your postings and efforts, you remind me of myself a few years ago – you’re on the right track in many respects, in my opinion.

    We’re always reading and learning, so a chance to have a new book in the library would be great. I’m interested in the ETF vs individual stock comparison.

    Keep up the good work.

    John in Kitchener



  74. coolbeans99 on June 11, 2008 at 12:51 am

    I am in for the win!



  75. spy vs. spy on June 11, 2008 at 1:11 am

    What do we know about author’s, Christopher L. Jones’, investing track record? Is he just a book worm?



  76. Sarlock on June 11, 2008 at 1:16 am

    Sounds like a good read, I’ll toss my name in the hat.



  77. Chris Chen on June 11, 2008 at 3:35 am

    This book sound very interesting. Put me down for one :)



  78. Ken on June 11, 2008 at 4:45 am

    Count me in!



  79. telefantastik on June 11, 2008 at 11:47 am

    i’m in! thx



  80. Denny on June 11, 2008 at 3:50 pm

    Please include me in the draw!

    Thanks kindly!



  81. RI on June 11, 2008 at 6:43 pm

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



  82. Quick Lunar Cop on June 12, 2008 at 9:40 am

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



  83. Colleen on June 12, 2008 at 9:52 am

    I appreciate your effort on this blog. Love it!



  84. Matt V on June 12, 2008 at 11:34 am

    I’m in! Great site…



  85. Kyle on June 12, 2008 at 12:43 pm

    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.



  86. Stephen Oakes on June 12, 2008 at 3:44 pm

    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



  87. Todd on June 12, 2008 at 5:13 pm

    count me in too!



  88. Matt T on June 12, 2008 at 7:06 pm

    Looks like a good one, love to read!



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