Andrew Allentuck
Monday, May 17, 2004

The First Time Investor: How to Start Safe, Invest Smart, and Sleep Well
By Larry Chambers and Dale Rogers
3d ed.; McGraw-Hill, 2004

In the ever expanding market of books for investment virgins, The First Time Investor stands out for its good sense, valuable information, refusal to talk down to the presumably naive reader, and balance.

Author Larry Chambers, a former stock broker, and Dale Rogers, a financial planner, take on the market and other investment gurus. On markets, they delve into the problem of what drives returns - most of it is asset category selection as between equities, bonds and cash. Of leading investment writers such as Suze Orman, they are rightly critical. Most of the stuff for first time investors is crap and Messrs. Chambers and Rogers say so. They note that leading brokers have recently paid huge fines for screwing their clients. If you can't trust Suze Orman to do more than peddle her books and Citigroup to keep its investment banking and retail investment departments separate - why can you trust?

This reviewer thinks you can trust the authors. Their works is highly U.S.-centric, but any reader at an introductory level can benefit from their presentation of the concept of the efficient frontier in asset allocation, from their demonstration that ailing companies can make great investments, from their review of market rotation through investment styles, from their evaluation of the role of fees on mutual fund performance and from their discussion of bonds.

The First Time Investor could be criticized as cursory. In spite of what is not in the book - eliminated to keep the thing reasonably short and readable - there is an awful lot of very good stuff. For an introductory lesson in investments, you can't do much better than The First Time Investor.