Book Review: Retirement GPS

This book encourages you to invest most of your savings abroad, away from the imperfect but good protections offered by US law.  I wrotea piece on this idea a few years agothat pointed out the problems with this idea.  (Note to those reading this at Amazon.com, Inc. (NASDAQ:AMZN),  Google Inc (NASDAQ:GOOG)“Aleph In Defense of Home Bias” and you will find my article.)

Now don’t get me wrong — I invest in foreign companies.  One-third of the assets that I run are invested abroad, in both developed and emerging markets.  International investment is good, but it is not a panacea.  There is no inherent advantage to investing abroad versus investing in the US.  Even if emerging markets are growing more rapidly, that doesn’t mean they are better to buy. because valuations are higher, and government policies are more fickle.

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This book is rather facile about problems in emerging markets. Problems with Brazil led me to sell my stocks when Dilma Rousseff was elected President. Lula promoted markets, Dilma did not.

I found this book to be long on cliches, and short on sharp ideas.  If you try to take the advice as an amateur, you will have a hard time doing it.  If you decide to hire an advisor other then the authors, you won’t get what the book offers.  Thus I can tell you that the book is merely a marketing pitch for their services, and so I tell you to avoid it.

Quibbles

Already expressed, though I would also add that the book didn’t feel right.  Too casual in the way that it treated topics.

Who would benefit from this book: Few would benefit from the book; the theory is flawed.  If you want to, you can buy it here:Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.

Full disclosure: The publisher sent me the book after asking me if I wanted it.

If you enter Amazon.com, Inc. (NASDAQ:AMZN) through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip.  Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned the book.  Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon.com, Inc. (NASDAQ:AMZN) do not enter via a referring website.  Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.  Whether you buy at Amazon directly or enter via my site, your prices don’t change.

By David Merkel, CFA of alephblog

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David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website RealMoney.com. Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.