Magazine article The CPA Journal

The Wall Street Journal Complete Money & Investing Guidebook

Magazine article The CPA Journal

The Wall Street Journal Complete Money & Investing Guidebook

Article excerpt

The Wall Street Journal Complete Money & Investing Guidebook By Dave Kansas Published by Three Rivers Press (December 2005); ISBN 0307236994; 224 pages; $14.95 (softcover)

Reviewed by Robert H. Yunich

Participating in employer-sponsored retirement plans such as 401 (k)s has turned more Americans than ever into investors. Many have limited experience and are overwhelmed by the daunting task of conserving and growing their capital. This guidebook focuses on "providing the keys to unlocking the mysteries of money and investing" rather than following the approach of other investment books, which often concentrate on describing the underlying theory that justifies the latest strategy and how to implement it.

The first two chapters address stocks and the stock market, touching upon everything from the history of the New York Stock Exchange to initial public offerings to the rudiments of evaluating stocks. The coverage of investing strategies considers only "fundamental" investing (a value-versus-growth discipline) and technical or chart-based investing, without mentioning the basis for evaluating any strategy, namely, modem portfolio theory.

The chapter on bonds describes the different types of financial instruments available. A brief narrative on implementing a laddering strategy is predicated on duration (a measure of the price sensitivity of changes in interest rates); however, the book doesn't define the term and doesn't discuss the concept of the yield curve.

The chapter titled "Wall Street" briefly describes the inner workings of Wall Street, such as the types of securities firms, securities research practices and analysts' ratings, investment banking, and securities regulation.

The long chapter on "Economics and Money" touches upon business cycles, inflation, fiscal policy, and the Federal Reserve, then turns to U.S. currency, bank accounts, and trading money.

The chapter on mutual funds enumerates the different types of funds that comprise this investment universe, then briefly explains how to invest in funds generally and how to evaluate specific funds. Although the author emphasizes the importance of diversification, his recommended "smart fund strategy" is "mixing bond funds and stock funds as well as domestic and overseas exposure. …

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