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Worry-Free Investing: A Safe Approach to Achieving Your Lifetime Financial Goals
Zvi Bodie
Michael Clowes

ISBN-10: 0130499277
ISBN-13:  9780130499271

Publisher:  FT Press
Copyright:  2003
Format:  Paper; 272 pp
Published:  05/12/2003
Status: Out of Print


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An indispensable guide to safe investing: how to have the money available when you absolutely, positively need it!



Foreword.


Preface.

I. WORRY-FREE INVESTING.

1. New Rules for Investing.

A New Strategy. Bad Advice. New Investments. Six Steps to Worry-Free Investing. Summary.

2. Investing with Inflation-Protected Bonds.

Setting Clear Goals. Why Plan? Inflation Risk. The Ins and Outs of I Bonds. TIPS. How to Compute the Amount You Need to Invest. Summary.

3. Reaching Your Retirement Goal.

The Retirement Goal. Social Security. Employer-Sponsored Pensions. Guaranteeing That Your Income Lasts as Long as You Do. Income Taxes. Transaction Costs. Economy of Motion Savings. Summary.

4. Investing Safely for College.

High-Priced Item. Section 529 Plans. Investment Choices and Risks. Free Advice. Summary.

5. Your Home as an Investment.

Is Buying Your Home a Safe Investment? Your Home as a Retirement Asset. Home Equity Conversion Plans. Summary.

6. Stocks Are Risky, Even in the Long Run.

Saving and Investing-Risk and Reward. An Objective View. Why Are Stocks Risky? Misleading Statistics. Simulating Stock Returns. The Effect of Periodic Withdrawals. Japan's Stock Market Crash-An Example to Remember. Summary.

7. Taking Calculated Risks in the Stock Market.

Who Should Invest in Stocks? Protecting Your Principal. Call Options. Combining Bonds with Stock Options. Convertible Bonds. Principal-Protected Equity-Participation Notes. Summary.

8. Investment Pitfalls and How to Avoid Them.

Myth 1: It Is Easy to Beat Stock Market Professionals at Their Own Game. Myth 2: You Can Identify the Best Money Managers by Looking at Their Track Records. Myth 3: Stocks Are Not Risky in the Long Run. Myth 4: Stocks Are the Best Hedge Against Inflation. Myth 5: Dollar Cost Averaging Improves Your Risk-Reward. Tradeoff. Myth 6: An Age-Based Portfolio Strategy Is the Best Way to Secure Your Lifecycle Saving Targets. Summary.

9. Putting It All Together.

Step 1: Set Goals. Step 2: Specify Targets. Step 3: Compute Your Required No-Risk Saving Rate. Step 4: Determine Your Tolerance for Risk. Step 5: Choose Your Risky Asset Portfolio. Step 6: Minimize Taxes and Transaction Costs. Summary.

10. Do You Need Professional Advice?

Many Kinds of Advisors. How to Find an Advisor You Can Trust. Summary.

II. FURTHER FOOD FOR THOUGHT.

11. Real-Life Examples of Worry-Free Retirement Investing.

Paul Younger. Mary and Marty Mature. Nancy and Steve Senior. Summary.

12. Frequently Asked Questions (FAQs).

About Worry-Free Investing. Whom Can I Trust? Is There Help Available from the SEC for Investors? How Do the Six Steps to Worry-Free Investing Differ from the SEC's Roadmap to Saving and Investing? Do I Need to Prepare a Personal Financial Statement? What Should I Do If Someone Gives Me a Hot Tip About a Stock or Other Investment? How Can I Tell When Stock Prices Are About to Go Up or Down? What Are the Best Index Funds for Small Investors? Should I Invest in an ETF Instead of an Index Fund? What Is the Difference Between Buying TIPS and Buying Shares in a TIPS Mutual Fund? Is a 529 Plan the Only Way to Save for a Child's College Education? If I Have Spare Cash Available, Am I Better Off Using It to Pay Off My Mortgage More Quickly or Investing It in Some Other Worry-Free Investing Asset? Summary.

13. The Worry-Free Toolbox.

Web Sites Related to Inflation-Protected Securities. Other Useful Tools and Web Sites. Dealing With Money When You Retire. Taking Your Risk Inventory. Summary.

Index.

View a Sample Chapter PDF:/samplechapter/0130499277.pdf

Zvi Bodie is a Professor of Finance at Boston University School of Management and a world-renowned investment consultant. He holds a Ph.D.from MIT and has served on the finance faculty at Harvard Business School and MITis Sloan School of Management. His market-leading textbook Investments, co-authored with Alex Kane and Alan Marcus, is used in the certification programs of the Financial Planning Association and the Society of Actuaries. His textbook Finance was coauthored by Nobel Prize winning economist, Robert C. Merton. Professor Bodie is a member of the Pension Research Council of the Wharton School, University of Pennsylvania.

Michael J. Clowes is Editorial Director of Investment News, and of Pensions and Investments, the pension industryis leading publication. He previously served as staff reporter for Forbes and U.S. correspondent for The Australian. He holds an MBA from Columbia University. He is author of The Money Flood.

"This book is a must for those timid souls who don't enjoy risk taking . . . like me."
--Franco Modigliani, Nobel Prize Winner, Economics

"Worry-Free Investing will enable you to achieve your retirement plans no matter what the stock and bond markets are doing. Bodie and Clowes present a safe way to build and control wealth. The methods are thoroughly and simply explained. Yet, the ideas stem from rigorous research and state-of-the-art science. This book is just what millions of investors need in these tough times."
--John R. Nofsinger, Finance professor, Washington State University, author of Investment Madness, Investment Blunder, and Infectious Greed

"Zvi Bodie and Michael Clowes have presented the proverbial 'missing link' to reliable investment management and worry-free financial planning. Considering the thousands of books available on equity investing, there is a remarkable shortage of information on risk-free bond and alternative income asset classes. This unique book will single-handedly help you balance your knowledge base as well as your portfolio.

"Uncomplicated and unbiased, this is a must read for everyone who needs to provide themselves with a sustainable income throughout their retirement. You won't find this material in any other investment book. When you are done lend your copy to a Financial Planner."
--Barry Cook, Do-It-Yourself Investor

"Bodie and Clowes' book is the most timely personal finance book of the year. Retirement investors, severely affected by the dot-com market bubble and employers' 401(k) malfeasance, are given simple ideas that will restore their hope in planning for retirement. It is a clarion call for 401(k) innovation and adding choices for TIPS (Treasury) bonds and equity funds containing downside protection. Such sensible, powerful retirement advice is truly a public service. Both authors deserve the Pulitzer Prize!"
--Clinton E. Day, Chartered Retirement Planning Counselor

"Bodie and Clowes' book is a useful compass for navigating the uncertain and sometimes treacherous waters of investing. Their insights deliver results."
--Louis Columbus, Senior Analyst, AMR Research

"A provocative and powerful debunking of the sovereign myth of equities as the camino real to retirement adequacy. This lucid and assuring guide is like none other in answering the individual investor's call for practical, trustworthy advice for safely achieving financial security. Highly recommended."
--Alan Cleveland, of Counsel to Sheehan Phinney, Bass and Green

Now that you've been betrayed by the stock market, how can you be sure your retirement or college money will be there when you need it? In Worry-Free Investing, two respected investment experts outline the ideal investment program for every investor worried about asset protection. Drawing on three powerful risk-reduction strategies, their plan virtually eradicates risk--and is virtually guaranteed to beat inflation!

The authors first demolish the myth that a diversified stock portfolio is your safest long-term investment. Next, they introduce U.S. government-backed investments that are protected against inflation and outline little-known investment techniques that are ideal for risk-averse investors.

Once you're sure your fundamental needs are covered, Worry-Free Investing helps you decide when to consider modest risk in the pursuit of higher returns--and how to strictly control whatever risk you do take on.

Clear and easy to understand, Worry-Free Investing is the only book for investors who want to protect their assets, no matter what.

Why the conventional wisdom about stocks is wrong
They are risky no matter what your time horizon

Safe, inflation-indexed U.S. government investments you've never heard of
How to be sure of your returns--regardless of the markets or inflation

Taking charge of your investments with Six Steps to Worry-Free Investing
Reducing your risk to the level that is appropriate for you

Diversification isn't enough
Risk-reduction strategies that work when diversification won't

Controlling the risks you choose to take
Practical techniques for increasing your potential upside while strictly limiting risk

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