It's been a while since I've read any decent books on investment theory and I feel in general I should do some heavy duty reading in it. Too much of my education in investment theory has been either by trial and error, word of mouth or personal finance books.
PF books are great, but in general they are proscriptive rather than analytical -- synthetic rather than original analysis. They provide a reliable set of rules to follow, but not a foundation for independent analysis.
To start, I've decided to read The Four Pillars of Investing by William Bernstein. It seems to be one of the fundamental books for those interested in an index investment strategy. I've worked my way through the introduction and will begin chapter 1 today.
One of the key messages is:
The finance industry is more interested in encouraging behaviour that generates transaction fees than enriching it's customers. The finance media makes it's money from the finance industry and serves encourages fee incurring behavior. Very little finance media is worth listening to, watching or reading.
A very interesting message.
Bernstein recommends reading investment books, the journal of finance and a small number of select authors and journals that in his oppinion are less interested in pushing products and financial transaction services than delivering news, theory and information of value.
Have a wonderful day,