Smarter Investing by Tim Hale (Third Edition)

Whenever I’m asked to recommend an investment book, I usually reply, “Smarter Investing by Tim Hale.”

For years it stood alone as the only guide to passive investing that catered for UK investors. While US readers could revel in the works of Bogle, Bernstein, Swedroe et al, only Tim Hale waved the flag for Britain.

And the truth is that, in many ways, his book is better than any of their mighty efforts.

Passive encounters of the third kind

Why is it superior? Because Smarter Investing – now in its third edition – is the clearest route map that you could want to guide you on your investing journey.

Investing philosophy, evidence, advice, product pointers plus the calculations required to materialise your goals and plot your course like neon way markers through a foggy swamp – it’s all there in Hale’s book.

Within short order, the author hacks through the fug that disorientates newbie investors and focuses your attention on the important things in life:

  • Investing over gambling.
  • Evidence over marketing.
  • Logic over emotion.
  • Discipline over delusions of grandeur.
  • Diversification, asset allocation, and index trackers over the half-baked rot you read in the newspapers.

Piece by piece, Smarter Investing lays out the trail that leads you to firm conclusions, a definite course of action, and some idea of where to go to pull the trigger.

It’s as close as you can get in book form to having your very own financial lackey serve you up a plan on a plate.

By the end, you can sketch out your own asset allocation, selection of funds, and schedule of contributions to hit retirement and be roughly in the right ballpark. All you have to do is fill in the blanks.

If paralysis analysis is your problem, then this book has the power to break the impasse.

Textbook execution

What it won’t do is fire your imagination. The prose does not sparkle. You won’t be whisked away, dancing on word beams that paint a picture brighter than a thousand suns.

Hale is dry, logical, and clear. His wisdom is understated. He doesn’t try to quicken your pulse or sugar the pill. In many ways, the book is like index investing itself. Dull, rational and effective. If you want excitement, go down the bookies.

You’ll need some stamina to stay the course but only because Hale takes the trouble to back up his assertions with evidence. He wants you to know that unlike many active funds’ marketing teams, he’s got credible research and theory on his side.

It’s hard to imagine a more useful book. It will teach you what returns you can reasonably expect from your portfolio and the chances that those returns might turn to dust, and shows you how scary the market big dipper can be and how long it can take to recover from a crash.

If DIY investing were taught in schools then Smarter Investing would be the core textbook. With any luck, because it’s your money on the line, you’ll be more motivated than any class of 16-year olds.

Yes, I can imagine a shorter and easier book. But not a more empowering one.

Take it steady,

The Accumulator

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