Ferri - The power of passive investing: more wealth with less work

The Power of Passive Investing

Copyright 2011 by Richard A. Ferri. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Ferri, Richard A.

The power of passive investing: more wealth with less work / Richard A. Ferri.

p. cm.

Includes index.

ISBN 978-0-470-59220-5 (hardback); ISBN 978-0-470-93708-2 (ebk);

ISBN 978-0-470-93712-9 (ebk); ISBN 978-1-118-00390-9 (ebk)

1. Index mutual funds. 2. Investments. I. Title.

HG4530.F428 2010

332.63'27dc22

2010028567

Additional Praise for The Power of Passive Investing

The retail stockbroker will soon become as extinct as the dinosaur, and good riddance. Thousands of investment professionals, tired of selling the same old lies, and millions of their clients, tired of hearing them, have deserted the brokerage business for a more elegant, effective, and honest way of managing money. Twenty years ago, Rick Ferri helped pioneer that transition. If youre an advisor or a broker, you owe it to yourself to read The Power of Passive Investing; if youre an investor, you owe it to your pocketbook.

Bill Bernstein, author, The Investors Manifesto

Im a big fan of Ricks books, and this is his best yet. Its the book on how to effectively harness the power of passive investing. Whether you are an individual investor or are responsible for billion-dollar portfolios, this book is critical to your success.

Allan Roth, author, How a Second Grader Beats Wall Street

Rick Ferri has written yet another terrific book. The numerous studies he reviews provide powerful support for passive investing and guide trustees and other fiduciaries toward this ideal solution.

W. Scott Simon, principal, Prudent Investor Advisors, LLC

Passive investments deserve a place in almost all investors portfolios, but the range of choices has never been so complex or treacherous. There are now every bit as many flawed, gimmicky, or overpriced index funds as there are those from active managers. If you want to navigate this new terrain successfully, youll find Rick Ferris The Power of Passive Investing an essential text.

Don Phillips, Managing Director, Morningstar, Inc.

Powerful! The extensive research behind this book makes a compelling case for a passive investing strategy. Ignore the information in this book at your own peril.

Mel Lindauer , Forbes columnist and co-author of The Bogleheads Guide to Investing and The Bogleheads Guide to Retirement Planning

The Power of Passive Investing is as much an enlightening history lesson as a compelling argument for building a portfolio on a foundation of index funds. Rick Ferri invigorates a long-standing debate with fresh proof and perspective that come from managing millions of dollars and reading reams of research. Dont mistake passive for wishy-washy; Ferris arguments are as sound, precise, and forceful as youd expect from a retired Marine Corps fighter pilot.

Robert Brokamp, CFP, Senior Advisor, The Motley Fools Rule Your Retirement service

If you doubt the power of passive investing, check out Rick Ferris new bookand youll discover a wealth of evidence that should sway even the most ardent fan of active investing.

Jonathan Clements, author, The Little Book of Main Street Money

Rick Ferri convincingly lays out the damage done by investing in actively managed mutual funds. He proves why we should be grateful to Jack Bogle for implementing index funds as a shield against Madoff-type shysters, lawsuits, unnecessary risk, and high costs. His clear writing, serious research, sound logic, and nuggets of wisdom illuminate both old and new-to-me dimensions of the compelling case for indexing.

Ed Tower, Professor of Economics at Duke University

Old-school index investing seems so simple, its amazing that someone like Rick Ferri, who just tells us the truth, is so rare. And what is the truth? That most investors are underperforming the market and being fleeced by Wall Street. Were lucky to have a crusader for common sense like Rick on our side.

Jim Wiandt, President and CEO, IndexUniverse

Few people understand indexing better than Rick Ferri. In The Power of Passive Investing, Rick clearly explains the sophistication of passive investing and how it will enhance account performance. If you havent yet incorporated passive investing into your portfolio, this book will convince you.

Taylor Larimore, co-author of The Bogleheads Guide to Investing and The Bogleheads Guide to Retirement Planning

Rick Ferri has brilliantly assembled hordes of unbiased, highly technical investment research so that the average investor can understand and benefit from what the smart money has known for decades. If you care about how much youll retire with, youll read The Power of Passive Investing.

Mitch Tuchman, CEO, MarketRiders, Inc.

Rick Ferri has gathered a wealth of research. A passive investment strategy is a great approach because it allows a person to focus on more important things in life.

Craig Israelsen, author of 7 Twelve: A Diversified Investment Portfolio with a Plan