Benjamin Graham - The Intelligent Investor

Good book. I wouldn’t go so far as to call it the best book on investment ever (although I only read two), but the advice in there is probably the best. Large parts I only skimmed since they are either outdated or very US-specific.

Even the commentary is at this point almost 20 years old. But core principles still apply. I wish I had read this sooner and skipped all the mistakes this book warns against. At least now I feel like I have the correct perspective and don’t feel pressure around picking stocks or getting on the latest investment bandwagon.

My takeaways:

• portfolio should be split about 50/50 between bonds (or similar instruments) and stocks (or similar instruments)
• a good bond alternative is regular cash or savings
• REIT is a good bet against inflation
• don’t pick stocks yourself, instead invest into whole market ETF like Vanguard S&P 500
• allocate 10% of the stock portfolio in non-US market ETF
• gold works like any other stock - it makes sense to buy at the right price. Gold price rises in time of crisis or inflation
• if picking individual stocks, diversify between at least 30
• only buy if the price of the stock is well below the value of the company
• the bigger the gap between those values, the better margin of safety
• NEVER buy without a margin of safety
• don’t invest money you will need in 5-10 years. Trading costs and tax will eat any gains or won’t be able to recoup from the loss
• invest for a minimum of 10-20 years
• don’t expect returns over 8%
• use dollar-cost averaging to monthly deposit equal amounts of money
• DO NOT try to time the market and do not respond to the market