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Investing Demystified: How to Invest Without Speculation and Sleepless Nights
Don't spend your time worrying whether you can beat the you don't need to beat them to be a successful investor. By showing you how to build a simple and rational portfolio and tailor it to your specific needs, "Investing Demystified "will help you generate superior returns.With his straightforward and jargon-free advice, Lars Kroijer simplies the often complex world of finance and tells you everything you need to know - and everything that you don't need to worry about - in order to make the most from your investments.In "Investing Demystified "you Discover the mix of stocks, bonds and cash needed for a top performing portfolio- Learn why the most broadly diversi_ ed and simplest portfolio makes the most sense- Understand the right level of risk for you and how this affects your investments- Find out why a low cost approach will yield bene_ ts whilst leaving you with a higher quality portfolio- Understand the implications of tax and liquidity
256 pages, Kindle Edition
First published January 1, 2013
110 people are currently reading
810 people want to read
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Displaying 1 - 26 of 26 reviews
March 30, 2020
The main question posed by the book is about having an investing edge. Many people think they have it but the great majority of investors do not and the book makes a compelling argument about it. Do you believe markets are efficient? It turns out it's very hard to beat the S&P 500 index, even for professional investors. If you don't have an edge and markets are efficient what to do?
Get a cheap index / ETF tracker that gives you wide exposure (ideally worldwide) that is tax-efficient and you're done. Book touches a few other interesting angles, simple portfolio building (equity + bonds), why gold is not that great, risks related to real estate investment.
There is even a chapter about investing during the apocalypse with Contagion (the movie) as a sample! The book is not USA focused, it's quite pragmatic for European investors.
Get a cheap index / ETF tracker that gives you wide exposure (ideally worldwide) that is tax-efficient and you're done. Book touches a few other interesting angles, simple portfolio building (equity + bonds), why gold is not that great, risks related to real estate investment.
There is even a chapter about investing during the apocalypse with Contagion (the movie) as a sample! The book is not USA focused, it's quite pragmatic for European investors.
March 4, 2014
former hedge fund manager says the average people should invest in low-cost index funds, globally diversified, using both bonds and equity.
February 3, 2020
Unlike other reviews, I am making my own takeaways through my lense as someone who works with computers a lot (lol...) with the 2 keywords: decentralization (diversification) , grid-computing (wisdom of crowds). But overall, this book "teaches" people to accept the fact that most of us cannot beat the market, then recommend us to put the money in creating a good portfolio and finally forget about it (smart investors = free investors) ==> a good read with just 250 pages.
1. Decentralization (Diversification) : instead of putting all eggs in 1 basket, split them out to different investment vehicles. Adjust your portfolio in accordance to your risk-tolerance level (World ETFs and high rated gov bonds..). And it is recommened not to lock your assets in some stocks or real estates or deposit in banks when you don't have the "competitive edge" to the markets (well, this can trigger multiple fights so I won't talk much except recommend you to compare nominal yields of those channels with inflation rate and local/global market risk levels throughout the years). Another point is to avoid "local heredity risk" - meaning that if you stay in UK, usually you would invest more in UK than other markets or you wouls put your assets within your local banks more than other, this would expose you to many risks (recessions, insitution bankruptcies as most banks have insurance limits on your deposits)
2. Grid-computing (Wisdom-of-crowds) : ETFs basically follow how the money flows in the world: in another the words, they copy the ratios of money flows in muliple markets and adjust the portfolios with the same ratios. For example: if all the money in the world is 100 and the US is 40, UK is 10 and China is 30 while the rest are 20, then world ETFs allocate your investment into those ratio "US:UK:China:the rest" as 40:10:30:20 (this applies to whatever "World ETFs" you put money into - gov bonds, IT, healthcare, or corporations market shares...). In short, "follow the crowd" - somewhat like grid computing where you utilize a bit of resources from every individual and then divert them to the main frame to solve challenging problems.
1. Decentralization (Diversification) : instead of putting all eggs in 1 basket, split them out to different investment vehicles. Adjust your portfolio in accordance to your risk-tolerance level (World ETFs and high rated gov bonds..). And it is recommened not to lock your assets in some stocks or real estates or deposit in banks when you don't have the "competitive edge" to the markets (well, this can trigger multiple fights so I won't talk much except recommend you to compare nominal yields of those channels with inflation rate and local/global market risk levels throughout the years). Another point is to avoid "local heredity risk" - meaning that if you stay in UK, usually you would invest more in UK than other markets or you wouls put your assets within your local banks more than other, this would expose you to many risks (recessions, insitution bankruptcies as most banks have insurance limits on your deposits)
2. Grid-computing (Wisdom-of-crowds) : ETFs basically follow how the money flows in the world: in another the words, they copy the ratios of money flows in muliple markets and adjust the portfolios with the same ratios. For example: if all the money in the world is 100 and the US is 40, UK is 10 and China is 30 while the rest are 20, then world ETFs allocate your investment into those ratio "US:UK:China:the rest" as 40:10:30:20 (this applies to whatever "World ETFs" you put money into - gov bonds, IT, healthcare, or corporations market shares...). In short, "follow the crowd" - somewhat like grid computing where you utilize a bit of resources from every individual and then divert them to the main frame to solve challenging problems.
January 26, 2019
The idea in this book is really good. Just get a world equities index tracker and use this with a bond fund domiciled in your own currency and you are good to go. Just split money between these two products based on your risk profile.
There is as per one comment above too much information beyond this point.
There is as per one comment above too much information beyond this point.
August 20, 2018
I think this book is way too long. It has some basic points and it endlessly repeats the same information.
July 29, 2025
A procedural and concise handbook with the fundamental assumption that you cannot outsmart the market. Although I believe you can, I do think it takes an effort which I am not willing to put in, in which case the advice in this book was quite useful: invest in index funds, preferably distributed among countries of the whole world (e.g. not just main markets), and throw in a bit of interest bonds depending on your risk appetite.
Have I done better in my investments than I otherwise would have? I'm not sure. But at least I have a strategy I can justify, which at least makes me confident in them, which maybe counts for something?
Have I done better in my investments than I otherwise would have? I'm not sure. But at least I have a strategy I can justify, which at least makes me confident in them, which maybe counts for something?
January 24, 2020
This book really does simplify the whole investing process for those who don't have much time on their hands to learn the complete ins and outs of investing to generate wealth. It quickly establishes the fact that the average investor does not have the necessary information to claim to hold an edge in the market. The book then guides the reader towards setting up a simple investment strategy to capitalize on this principle, creating what it calls a "rational" portfolio.
For a person like me with no passive income streams, company shares, or noteworthy assets to my name at the time of writing, Investing Demystified served to be the perfect entrance into the world of investing and long-term wealth generation. Considering the data-rich material Kroijer was working with, the book proved to be quite engaging. He even managed to touch on a few of the more technical aspects of investing without hindering the book's flow. This is because much of the mathematical and theoretical analyses are left to the appendices where the curious investor can peruse the underlying premises of the rational portfolio if they so desire. The book also does a good job at arming the reader with the knowledge required to smartly deviate from the rational strategy where an investor' specific situation warrants an adjustment.
That being said, I would have liked the book to provide me with enough information to adapt the portfolio to meet Muslim investing regulations and requirements, rather than simply highlighting the inefficacy experienced by those who deviate from the rational portfolio. However, I can't mark the book down for this as it was not created to advise Muslim investors on Halal investment strategies. Regardless, the book laid down enough of the basic concepts for me to understand what kind of return I would be missing out on as well as why this would be the case, and also equipped me with a general understanding of which Halal investing options would be preferential over others.
For a beginner that is truly interesting in stepping into the world of investing, this book will provide a clear and concise insight into long-term investing strategy, and is likely to keep the reader's interest consistently through its 243 pages.
For a person like me with no passive income streams, company shares, or noteworthy assets to my name at the time of writing, Investing Demystified served to be the perfect entrance into the world of investing and long-term wealth generation. Considering the data-rich material Kroijer was working with, the book proved to be quite engaging. He even managed to touch on a few of the more technical aspects of investing without hindering the book's flow. This is because much of the mathematical and theoretical analyses are left to the appendices where the curious investor can peruse the underlying premises of the rational portfolio if they so desire. The book also does a good job at arming the reader with the knowledge required to smartly deviate from the rational strategy where an investor' specific situation warrants an adjustment.
That being said, I would have liked the book to provide me with enough information to adapt the portfolio to meet Muslim investing regulations and requirements, rather than simply highlighting the inefficacy experienced by those who deviate from the rational portfolio. However, I can't mark the book down for this as it was not created to advise Muslim investors on Halal investment strategies. Regardless, the book laid down enough of the basic concepts for me to understand what kind of return I would be missing out on as well as why this would be the case, and also equipped me with a general understanding of which Halal investing options would be preferential over others.
For a beginner that is truly interesting in stepping into the world of investing, this book will provide a clear and concise insight into long-term investing strategy, and is likely to keep the reader's interest consistently through its 243 pages.
September 19, 2024
If you are looking for a book which tells you how to invest long-term with minimal hassle, but doesn't use kid gloves, this book is recommended.
I've read enough books which spend a whole chapter on "what is an ETF" and "what is an index". Without being too smart you can work these things out yourself. Those books are useful in offering some ground rules, but if you want to learn more about *why* they say what they do then pick up "Investing Demystified".
Ex-fund-manager Lars Kroijer lays out what all individual investors should be acknowledging: "you don't have an edge". I've been there and I was wooed with the stories of Warren Buffet and value investing, and guess what - putting the time and effort in to pick stocks like that is hard, and your own market may be even harder, it eats us your time and it is still more likely than not to leave you behind the index.
Kroijer spells out the obvious - a simple mindset and tactic to accept that you don't have an edge and to simply embrace the market wisdom. Thankfully, prior to my dabbling I had already done this and surprise surprise those returns far out stripped my own hubris-driven portfolio.
Kroijer also lays out some very sensible and assertable ground rules for investing which I have taken to heart.
The book is more interesting than a textbook (but still requires focus and attention), and for those made of sterner stuff he puts the nitty gritty into several appendices. It does however lose a star from a very odd "apocalypse investing" chapter, and maybe a couple of missed opportunities to clarify some assertions. Maybe there will be improvements in the Third Edition.
So if you want to peek more under the bedsheets of why passive index-based investing is a wise choice for most people, pick up this book.
I've read enough books which spend a whole chapter on "what is an ETF" and "what is an index". Without being too smart you can work these things out yourself. Those books are useful in offering some ground rules, but if you want to learn more about *why* they say what they do then pick up "Investing Demystified".
Ex-fund-manager Lars Kroijer lays out what all individual investors should be acknowledging: "you don't have an edge". I've been there and I was wooed with the stories of Warren Buffet and value investing, and guess what - putting the time and effort in to pick stocks like that is hard, and your own market may be even harder, it eats us your time and it is still more likely than not to leave you behind the index.
Kroijer spells out the obvious - a simple mindset and tactic to accept that you don't have an edge and to simply embrace the market wisdom. Thankfully, prior to my dabbling I had already done this and surprise surprise those returns far out stripped my own hubris-driven portfolio.
Kroijer also lays out some very sensible and assertable ground rules for investing which I have taken to heart.
The book is more interesting than a textbook (but still requires focus and attention), and for those made of sterner stuff he puts the nitty gritty into several appendices. It does however lose a star from a very odd "apocalypse investing" chapter, and maybe a couple of missed opportunities to clarify some assertions. Maybe there will be improvements in the Third Edition.
So if you want to peek more under the bedsheets of why passive index-based investing is a wise choice for most people, pick up this book.
May 20, 2017
I don't have much to add that I didn't write in my review of How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely, because as I see it, this is a logical continuation / complement, with a little more rigour for the deeply curious and / or sceptical.
The overall philosophy is very similar (wide diversification, set-and-forget, avoid trading fees), with some very interesting deeper detail for those who are willing to invest a bit more time, thought, and effort, in order to squeeze a little more out of their portfolios.
Sure, one can cherry-pick individual equities hoping for a higher reward, but don't kid yourself that you're doing anything other than sophisticated gambling, fuelled by your confirmation bias. (Unless you are in the rare case of having a genuine edge, in which case good luck and have fun.)
As with the Andrew Craig book mentioned above, it's pretty-much impossible to argue against the points made here, and I'd say it's equally essential for anyone wanting to set up a solid portfolio for their future.
The overall philosophy is very similar (wide diversification, set-and-forget, avoid trading fees), with some very interesting deeper detail for those who are willing to invest a bit more time, thought, and effort, in order to squeeze a little more out of their portfolios.
Sure, one can cherry-pick individual equities hoping for a higher reward, but don't kid yourself that you're doing anything other than sophisticated gambling, fuelled by your confirmation bias. (Unless you are in the rare case of having a genuine edge, in which case good luck and have fun.)
As with the Andrew Craig book mentioned above, it's pretty-much impossible to argue against the points made here, and I'd say it's equally essential for anyone wanting to set up a solid portfolio for their future.
February 24, 2023
Overall I think this is a good book that will teach you an investment approach that 90% of people should follow. The first 2 parts of the book will hammer the same point (do you have an "edge" on the markeys? what the "rational" portfolio is?) and might get somewhat repetitive but I think this is the author's way of getting across the main message of the book.
The rest of the book, though, is very good and it has some perspectives I haven´t seen in other personal investment books. For example: thinking about the non investment assets you have, the reasoning for excluding some types of assets and some generalities on how to practically implement the portfolio.
The main negative point is that the beginning can get a bit repetitive. Other than that, this is a highly recommended read if you want to start investing.
The rest of the book, though, is very good and it has some perspectives I haven´t seen in other personal investment books. For example: thinking about the non investment assets you have, the reasoning for excluding some types of assets and some generalities on how to practically implement the portfolio.
The main negative point is that the beginning can get a bit repetitive. Other than that, this is a highly recommended read if you want to start investing.
October 7, 2023
4,5/5
Entiendo que la primera edición contenía más información sobre la implementación un poco más compleja de un portafolio de bonos, que en la segunda edición pasan a ser apéndices insuficientes.
Por lo demás, es muy buen libro que, aunque simplifica de manera casi grosera conceptos complejos tiene gran mérito la manera sistemática de Kroijer de regresar cualquier tipo de heurística a sus axiomas sobre diversificación y mercados eficientes. Puedes decir que es muy conservador pero al momento de terminar el libro es difícil encontrar fallos en su lógica.
Un gran punto a su favor y que se agradece es el capítulo sobre los black swan events y escenarios apocalípticos.
Definitivamente es una actualización relevante y pertinente de los libros de John Bogle.
Entiendo que la primera edición contenía más información sobre la implementación un poco más compleja de un portafolio de bonos, que en la segunda edición pasan a ser apéndices insuficientes.
Por lo demás, es muy buen libro que, aunque simplifica de manera casi grosera conceptos complejos tiene gran mérito la manera sistemática de Kroijer de regresar cualquier tipo de heurística a sus axiomas sobre diversificación y mercados eficientes. Puedes decir que es muy conservador pero al momento de terminar el libro es difícil encontrar fallos en su lógica.
Un gran punto a su favor y que se agradece es el capítulo sobre los black swan events y escenarios apocalípticos.
Definitivamente es una actualización relevante y pertinente de los libros de John Bogle.
February 20, 2019
Comforting for an investor with no edge
+Simple concepts which holds for investors with no edge
+Thorough maths workthroughs - which makes the arguments more credible and understandable
-However still very US/Eurocentric, the investment product landscape for investors native to emerging markets may be very different. For example this book recommends not investing in funds with fees over 0.6% per year. But in thailand the cheapest world equity product is around 1.1% currently.
-I am not suggesting that he should go into detail about this but a few pointers to where to get more info would be nice.
Overall, a superb book. I recommend.
+Simple concepts which holds for investors with no edge
+Thorough maths workthroughs - which makes the arguments more credible and understandable
-However still very US/Eurocentric, the investment product landscape for investors native to emerging markets may be very different. For example this book recommends not investing in funds with fees over 0.6% per year. But in thailand the cheapest world equity product is around 1.1% currently.
-I am not suggesting that he should go into detail about this but a few pointers to where to get more info would be nice.
Overall, a superb book. I recommend.
October 7, 2019
A wonderfully written book, enjoyed every single bit of it (although it took me a while to read because of work)
I would highly recommend this book to anyone seeking to learn about investing, BUT, not as their first book on investing! This is solely because it is so well researched that there is too much to take in at once (essentially my critique is a compliment lol)
Overall, a very well written book!
I would highly recommend this book to anyone seeking to learn about investing, BUT, not as their first book on investing! This is solely because it is so well researched that there is too much to take in at once (essentially my critique is a compliment lol)
Overall, a very well written book!
December 24, 2017
Simple advice
This book will help most investors implement a cheap and well diversified portfolio. It has convinced me to make a World ETF a major plank in my SIPP, but I still feel focussing part of the portfolio on fast growing sectors and regions will nudge my total returns up.
This book will help most investors implement a cheap and well diversified portfolio. It has convinced me to make a World ETF a major plank in my SIPP, but I still feel focussing part of the portfolio on fast growing sectors and regions will nudge my total returns up.
December 17, 2019
An excellent and surprisingly easy-to-read book to guide the reader through the most grounded investing logic I’ve read for some time. I even understood 95% of it. 🙂
It’s not a ‘get rich quick’ kind of book, and I can’t vouch for the results yet either but I will adopt these simple and sensible principles and see how I do.
Lots of light-bulb moments, so it’s worthy of 5 stars.
It’s not a ‘get rich quick’ kind of book, and I can’t vouch for the results yet either but I will adopt these simple and sensible principles and see how I do.
Lots of light-bulb moments, so it’s worthy of 5 stars.
December 29, 2018
Excellent book. Encourages the reader to think methodically about the decision making processes in putting together an investment portfolio. At approx. 250 pages it is also quite a concise read. Highly recommended.
August 4, 2025
Useful read with generally good advice that’s easy to follow. There is a fair bit if repetition, so could probably do with trimming down a bit and a lot of discussion on bonds, which could probably do with an update from government behaviour in recent years. Rather quirky author.
December 10, 2018
Good information but repetitive explanations. Could be way shortened.
Read
July 1, 2019great book on passive investing especially the writer gave great importance on ETFs
May 10, 2020
A great financial primer with a clear and easy to understand message
December 29, 2020
Interesting book that concisely summarises a practical way to build wealth over a long-term horizon. Although it doesn't provide any trendy tips on trading, it still gives a solid foundation on portfolio construction.
July 31, 2022
Brilliantly written, simple to understand and very implementable. Excellent book. Keeping a copy on my shelf for reference.
January 13, 2023
Should be essential reading, even if you’re already aware of the concepts around Rational Investing/are a Boglehead…
September 27, 2023
very good idea but could have been just a chapter rather than a full book!
Read
October 7, 2020Fascinating. A former hedge fund manager writes.
December 9, 2013
The book's main philosophy is constantly broken down and reiterated throughout the chapters so it is good for beginner's or someone who wants to a simple investing portfolio. It was quite a light read and had a key takeaways and specific financial products to look at. I would have appreciated better editing (many typos, spotted a labelling error of a graph and could be more concise!) for one and also model portfolios (e.g. putting the rational portfolio through previous data over a period of time to see the ROI) and more specific indexes to look at. He also speaks of online platforms such as iShares and Vanguard but I thought he could talk about other modes of investing or making trades for personal investment.
Displaying 1 - 26 of 26 reviews