Wall Street Journal Complete Money & Investing
by Three Rivers Press (December 2005); ISBN 0307236994;
224 pages; $14.95 (softcover)
by Robert H. Yunich
SEPTEMBER 2006 - 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.
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,
modern portfolio theory.
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.
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.
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.
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.” Building on the narrative
about different fund types or asset classes, the author
could have provided additional commentary on the theory
of asset allocation to better inform the reader about the
need for drilling down on the selection of individual stock
or bond funds. Other than noting that “rebalancing”
is another component of a “smart strategy,”
the author does not delve into the need to monitor portfolio
first part of the chapter on retirement investing describes
the investment vehicles that are available. The author alludes
to the notion of “risk tolerance” but only from
the standpoint of the split between stocks and bonds relative
to the investor’s age. This is the time-horizon aspect
of risk tolerance, and the author glosses over the
potential volatility component of risk tolerance.
final chapters cover hedge funds, options and futures, and
nontraditional investments such as collectibles and real
estate investing, including real estate investment trusts.
Two very good features of the book are a listing, at the
end of each chapter, of online resources and additional
suggested reading, and an extensive glossary of financial
the author’s own admission, this book is designed
to enable the reader to make intelligent cocktail- or dinner-party
conversation about money and investing matters. He wisely
encourages the reader to consult with a financial planner
about specific individual investment strategies. The book
is a compendium that provides ample substance and fact and
generally achieves its stated objective. It is similar to
a cookbook that lists all available ingredients without
giving any real recipes. Perhaps, in subsequent editions,
the author might consider some revisions for the sake of
greater focus and completeness to enable a deeper dive rather
than emulating the honeybee buzzing from flower to flower.
H. Yunich, CPA/PFS, CLTC, is a financial planner
in New York City with New England Wealth Strategies, a general
agency of New England Financial (an affiliate of MetLife).
The views expressed are not necessarily those of MetLife or
any of its affiliated companies. For further information on
Robert H. Yunich, visit ryunichltc.com.