THE INVESTORS' ADVOCATE

Hunter presents a guide for achieving greater success in personal investing.

After years of working as an investment consultant, the now-retired author has written a concise and densely packed instruction manual for investing, distilling what he’s learned over a career spent dealing with money and the markets. Modern portfolio theory, Hunter writes, assumes that the markets are efficient, that every element involved in any given trade is known, and, perhaps most crucially, that investors act rationally. “That set of assumptions,” he asserts, “simply is not supported by the reality of human and market behavior.” The author posits that three courses are open to investors dealing with the fluctuations of the market: ignore them, take advantage of them, or get caught up in them. About the third option, he writes simply, “Danger lies this way.” Hunter proposes three steps to picking stocks that will help readers avoid getting swept up in the frenzy: Make a written statement of investment objectives, work out a plan and a timetable for those objectives, and create that path to achieving those goals with an investment policy statement. The statement must be simple, diversified, and low-maintenance (scheduled over four quarterly cycles). Over 90% of private investors underperform in general market returns, he contends, and his guidelines are aimed at helping readers avoid such a fate. Throughout the guide, the author is a cool, authoritative adviser who hews closely to a line he relates from economist John Maynard Keynes: “It’s better to fail conventionally than succeed unconventionally.” Hunter writes clearly and concisely, defining investment terms and reminding readers of the importance of understanding their own motivations and goals. “You need to determine if your glass is half full or your glass is half empty,” he writes. “Hence the beginning of the counsel of this book: First and foremost, know yourself.”

A lean and immensely informative handbook for investing.