The Women’s Guide to Successful Investing intends to educate the women regarding investments and to increase the readers’ financial IQ. The author aims to help the readers to establish a discipline that we will feel comfortable employing during good and difficult markets. I would like to learn the advice that the author gives and uses to become successful investors from this book.
Nancy Tengler is a columnist, author, financial news commentator, and university professor. She has worked as a Chief Executive and Chief Investment Officer, overseeing the management of tens of billions of dollars globally. She has been named one of Money Magazine’s Best Women Investors and served as a regular guest host on CNBC as well as a frequent guest on PBS, CNN, CBS, NBC and Bloomberg TV.
The Women’s Guide to Successful Investing comprises a foreword, a preface, 14 chapters, and an appendix.
The chapters are:
1) Wealth Accumulation Is an Attitude: Investing for Your Future Requires a Few Goals and Much Less Capital Than You Think,
2) Why Women Make Excellent Investors: Women Inherently Display the Traits Required for Successful Investing,
3) In Order to Get There We Need to Know Where We Are Going: Establishing Financial Goals Informs Successful Savings and Investment Plans,
4) Developing an Investment Discipline That Will Achieve Our Goals: For the Diligent Student and Practitioner, Investing – Like Any Skill – Can Be Perfected; Matching Our Investment Strategy with Our Goals Is Paramount,
5) Developing an Investment Discipline That Will Achieve Our Goals – Continued: The Stock Market Is a Tug-of-War between Fear and Greed; Arm Yourself with the Tools to Succeed,
6) Construct Your Portfolio Like a Dinner Party Invitation List: Holdings Should Be Balanced and Behave Well If Things Get Out of Hand,
7) Meet Your Research Team: A Smartphone and Sirius XM Radio Account – Accessible and Timely Financial Information for Busy Women,
8) Apple Computer – A Case Study in How to Select a Core Holding: A Role Model Investment You Will Want to Emulate,
9) A Case Study of a Stalled Luxury Brand – Coach, Inc.: Whether Coach Bags Fit Your Budget or Style, We Can Learn a Great Deal from This Former Darling,
10) Stocks to Own for a Lifetime: Identifying Industry Leaders Provides the Conviction Required to Buy Stocks We Are Willing to Hold for Decades,
11) ETFs to Own for a Lifetime: How Women Investors Can Get Their Groove Back,
12) Five Critical Lessons and Warnings: Don’t Touch a Hot Stove, Don’t Talk to Strangers, and Other Lessons for the Ages,
13) Eleven Intelligent Investing Rules – And One More for Good Measure: Rules for Women to Invest By,
14) If You Are Going to Hire a Professional Investment Advisor, Let’s Make Sure You Hire the Best: You Really Can Do This on Your Own but for Those of You Who Don’t, Consider the following Guidelines.
The appendix contains useful investment websites recommended by the author.
Financial independence is achieved through saving and investing. Wealth generation is achieved through investing what we have saved, not simply saving alone. Thus, the author wants the readers to invest our saved money, rather than letting it sit in the bank.
Our investing objective should be getting it mostly right and generating a steady return over time. Long-term investing will generate excellent returns for patient investors. What does it mean by long-term? The time horizon for investing should be at least 3 – 5 years. This time period allows the investors to incubate growth and weather any potential downturns.
The necessary traits to be successful investors are discipline, an appropriate confidence level, and a willingness to invest for the long term (which means lower levels of trading).
When we buy stocks, we are buying their earnings (now or in the future). Her criteria of selecting a stock includes both qualitative factors (great management team and corporate culture, brand and industry dominance, and innovation or adaptability) and quantitative factors (the dividend as management’s proxy for earnings growth, price/earnings ratio, price/sales ratio, and price/earnings to growth ratio).
One of her investing styles is growth at a reasonable price (GARP) which is blending growth and value investing. Perhaps we could learn a trick or two from her. She also adjusts her portfolio based on market weightings. Furthermore, she also uses market weakness to add to holdings, provided it is a good stock.
One of the things I learned from the book is that we can use Bloomberg to check the price-to-earnings ratio of S&P 500 and also KLCI. Besides that, she presents her stock picks in Chapter 10 and 11. But this book was published in 2014, so these picks might be outdated.
The author has given us 11 Intelligent Investing Rules in the book. I will try to summarize them in my own words here. We should devise an investing strategy that suits our own objectives and life goals and stick to the plan. Remain dispassionate and diligent when investing. Do research by focusing on specific qualitative and valuation factors and form our own opinion on a stock. Diversify. Make adjustments to the portfolio as necessary. Lastly, save on investment fees as much as possible, without sacrificing the quality of service.
There are many analogies in this book which I find to be fitting. For example, investing is like raising children. You do the hard work – and plenty of it – for many years without reaping tangible results. The other is investing is akin to building equity – to buy a portion of a corporation and wait for it to appreciate.
I found some grammar mistakes and typos in the book but they do not adversely affect the reading experience. Some advice in the book are US-specific, especially regarding tax issue, so we can ignore what are not applicable. Though the primary audience of this book is women, I think that it is suitable for any long-term value investors, regardless of the gender.
This book can be summarized by the following paragraph.
Investing is about taking risks and knowing your limitations. So we have to be prepared to accept some risks. Nevertheless, by owning the right stocks with the right management team, we can expect long-term, even a lifetime of solid performance and income growth.
- Money is not an ends, it is a means to an ends.
- Remember that there is one tried and true investing tenet: Things are rarely different.
- Buying early is one of the occupational hazards of being an investor.
- Arrogance is the first step down a slippery slope to potential portfolio losses.
- Investment management fees are the single greatest risk to long-term investment performance.
Interested in The Women’s Guide to Successful Investing?
I borrowed this book and I could not find a store in Malaysia that sells this book. If you know where to get this book, kindly leave a comment below.