Author: Edward Winslow
Publisher: Berrett-Koehler Publishers Inc

Credentials: CPA, CFP, ChFC, CLU, FLMI, ARM
Independent financial consultant, founder of Protect Money Investments
Founder, President and Chairman of First Affirmative Financial Network

Author’s Website: http://www.protectmoney.com

Table of Contents:
1. Protect Investments
2. Avoiding Stocks – Reasons
3. Strategies to handle uncertainty
4. Smarter & Safer Investments – index funds, Market Certificates of Deposits, annuities, equity-index life insurance, equity-linked notes, hedging

Comments:
This book discusses what the difference between investing and gambling is. The typical investor thinks of investing as purely looking at potential investment gains rather than examining the potential risks involved. In reality, if the aim of the individual is to beat inflation and earn money from his money, then eliminating risk is an important step to take prior to placing money into an investment instrument. This is precisely what Winslow is talking about.

Winslow makes no apologies in dissuading the reader from investing in stocks and mutual funds (or unit trusts). There are several reasons for doing so, including the ‘blind faith’ placed in the stock market, the company management, fund managers to increase the value of the investments placed. History has provided many cases of mismanagement and fraud within companies (think Enron) and manipulation of the stock market (think too the fees you incur in buying stocks). Mutual funds, while providing diversification (thus reducing risks to a certain extent), takes away a portion of your returns annually, even when funds are not performing as well as the market.

Making a case for investors who are conservative and yet want higher returns, Winslow argues that there are instruments available that help eliminate (not reduce) risks involved in investments. For instance, annuities, equity-index life insurance and hedge funds are some examples of such instruments. Winslow argues that index funds, though low in management fees, do not eliminate market risks entirely. The market does not remember the price you buy the index fund. It has no memory.

All in, this book consolidates the various points investors think of when thinking of investment opportunities. While written in the American context, the book is also useful for Singapore investors for investment education. A word of caution: Winslow is an advocate of obtaining financial expertise for help in looking at investment opportunities. While this is an acceptable practice, he does not make a case why accredited financial planners will offer good advice if one can read up on books on his own. Neither does he offer the reader guidance in investment education. However this book is worth reading for investment realities that are present.

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