Stocks for the long run The definitive guide to financial market returns & long-term investment strategies

Siegel (Wharton School, Univ. of Pennsylvania) provides an updated, revised edition of one of the best books written on investments. New material encompasses the causes and consequences of the 2008-09 financial crises. Siegel places the blame for these crises squarely on the CEOs of large investment banks, their regulators, and Congress. The book provides extensive coverage of the efficient market hypothesis and anomalies, historical returns, market volatility, derivatives, and securities valuation (e.g., earnings yield, the P/E, the P/B, and CAPE ratios). Concise individual chapters are devoted to gold, the impact of world events, technical analysis, and behavioral finance. Siegel emphasizes that to be successful, investors should take a long-term perspective; as the investment horizon increases, stocks consistently outperform bonds. The author also stresses the importance of dividends instead of capital gains to total returns. Siegel suggests that the individual investor acquire exchange-traded funds instead of index funds and individual stocks since ETFs offer diversification, lower operating expenses, and tax advantages. The writing is so lucid that lay investors can readily comprehend the concepts. This book should be read by every serious investor, and it is appropriate for undergraduate students and practitioners alike. Summing Up: Highly recommended. Lower-division undergraduates and above. H. Mayo The College of New Jersey