This book explains why the conventional strategies of buy & hold and owning the classic mix of 60% stocks and 40% bonds will not be efficient moving forward. It highlights many headwinds that most investors are simply unaware of. For example, how people (as emotional beings) are inherently poor investors and why that is, the consequences of the Federal Reserve's low interest rate policies, and why the most popular financial tools like mutual funds (especially target-date retirement funds), 401ks, 529 plans are technically flawed.
As for solutions the book outlines numerous strategies that can be implemented by the reader on their own or outsourced to proven managers (specifics provided). The overlapping theme of all the recommendations is for more hands-on / tactical / non-emotional / systematic management that allows the investor to accomplish something that has been severly lacking from conventional Wall Street solutions = the ability to play defense as well as offense in the face of a future market decline.
With stocks at elevated prices, bonds at risk of declining in value with rising rates, and cash paying nothing, what would you advise your friends and family to do with their money? This book was written with them in mind and attempts to provide solutions and answers to that question in what is undoubtedly a unique economic environment.
Debut authors Higgins and Hajek propose a boldly different investment strategy. Financial planner Higgins and CPA Hajek have combined to craft a book designed to upend the investing apple cart. Claiming that the conventional balanced portfolio of 60 percent stocks and 40 percent bonds is outdated and impractical, they urge readers to “step outside-the-box and consider some different ideas and insights.” They begin by questioning conventional investing, exploring investment psychology and exploding common myths. The authors then lay a foundation for unconventional thinking with a highly informative discussion of five key issues investors must firstunderstand: debt, deficits, quantitative easing, inflation and rising rates. Particularly compelling are their discussions of“the 401(k) handcuff” and “the inherent flaws embedded within the increasingly popular target date retirement funds.” Inthe appealing second half of the book, Higgins and Hajek explain in considerable detail five specific unconventionalstrategies. One of the more dramatic aspects of this section is the statistical evidence they offer: The “classic” (60/40) portfolio shows a 15-year annualized return of 5.65 percent, while their new “7Twelve Balanced Portfolio” (“twelveselected funds within seven core asset classes”) reaps a 15-year annualized return of 8.44 percent. This is only part of thestory; the authors go far beyond investing in stocks alone, discussing a broad range of investments from gold to real estate investment trusts. While Higgins and Hajek claim they wrote this book for the ordinary investor rather than afinancial professional, the average reader might be somewhat overwhelmed by the detailed analysis shown in examples,charts and graphs. Still, the well-written material supports the authors’ contention that less traditional investment vehicles may be better bets. In the end, Higgins and Hajek advocate being open to other investment options and takingpersonal control of one’s investment strategy—sound advice for any investor who wants to maximize returns.Wise, authoritative and carefully documented; should stimulate deep thought in those who are willing to break free of the conventional investing mode.
Reviewed by Danita Dyess for Readers' Favorite
In Unconventional Investing, Tim Higgins, certified professional planner, and Michael Hajek III, certified professional accountant, totally defy traditional investing methods by supplying irrefutable evidence that confirms one thing: they do not work. For example, the 60/40 rule -- the time-honored notion that your portfolio should be comprised of 60 percent stocks and 40 percent bonds is obsolete. There is no guarantee that this formula will yield a reliable return. Similarly, the venerated buy and hold method -- a doctrine widely used in the investment communities of the ’90s -- will experience volatility and modest gains. They also warn potential investors about guessing the capricious movements of the stock market; the ups and downs are unpredictable. Readers will appreciate the conversational tone and the delivery of sophisticated concepts in layman's terms, with charts, graphs and comments from the world's foremost industry experts.
The cover is simple and apt. Initially, I was not impressed with the contents listed in the Table of Contents. But when I read the material in depth, I realized the material was intended for me, the average person -- not the investment professional. After I finished each chapter, I wanted to know more. Thus, Tim Higgins and Michael Hajek are passionate about their mission to eradicate group thinking which reflects the "old school" thinking that leads to delays resulting in problems with home ownership, retirement options, etc. You can quickly and easily find the specific topics of interest, e.g. tax-efficient investing, trend analysis, etc. Unconventional Investing is highly recommended.