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FOOLISH: How Investors Get Worked Up and Worked Over by the System
Wall Street brokerage firms won't be happy about this book. That's because brokerage firms have built their businesses on profiting in the shadows, and they surely don't want the lights to come on.
After 25 years on Wall Street and another 10 years as a fee-only fiduciary RIA, Gil Baumgarten knows all the brokerage tactics that make your portfolio inefficient and put you at a disadvantage. He also understands the common, self-destructive tendencies that make every investor vulnerable to brokerage firm schemes.
FOOLI$H pulls no punches. This book is your inside look at the complicated brokerage ecosystem and the realities of investor behavior. You'll discover the staggering differences between brokerage and advisory systems and walk away with actionable advice to help you stay on guard. Most importantly, you'll take an introspective look at your investing style and learn how to walk away from the FOOLI$H routes investors so often take.
After 25 years on Wall Street and another 10 years as a fee-only fiduciary RIA, Gil Baumgarten knows all the brokerage tactics that make your portfolio inefficient and put you at a disadvantage. He also understands the common, self-destructive tendencies that make every investor vulnerable to brokerage firm schemes.
FOOLI$H pulls no punches. This book is your inside look at the complicated brokerage ecosystem and the realities of investor behavior. You'll discover the staggering differences between brokerage and advisory systems and walk away with actionable advice to help you stay on guard. Most importantly, you'll take an introspective look at your investing style and learn how to walk away from the FOOLI$H routes investors so often take.
258 pages, Kindle Edition
Published May 4, 2021
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Displaying 1 - 6 of 6 reviews
September 12, 2023
Thank you Goodreads Giveaways
November 2, 2021
I'm always trying to learn more about the world of finance and retirement planning thus this book provided me yet more insight. The author is clearly an expert in this field but maybe I wasn't as excited about this book as I already knew much of the information. Regardless, the author provided many ideas to think about in my future portfolio, stock trading, and general financial planning. Key excerpts are below:
- “... Investors see an “expense ratio”, which is quoted as a percentage of invested assets and includes the costs of investment management, legal, accounting, auditing, and even advertising and promotion. Yet the cost of advertising and promotion includes a kickback to the broker and the brokerage firm. p38 PJK: Something to consider in any long term investment; the broker has to earn money.
- This is not so for the typical mom and pop investor, who benefits from less activity, not more, occurring in their account. p65 PJK: another interesting bit of wisdom, especially when considering tax implications as per the last of my excerpts below.
- A plate of index funds wouldn't generate much for the firm. That's why they put end dates on products and design products offering the chance at excess return. My boss would say, “The last thing you want in your clients is accounts are dormant assets.” Brokerage firms produce internal reports on dormancy to identify “opportunities”.... Generate transactions so the firm can earn Commission revenue. Ultimately, keep the pot stirred. p79 PJK: once again, something to think about if a broker calls you.
- If a profitable security is held for less than 366 days before being sold, it is deemed to be a short-term realized gain and is taxed at the investor's ordinary income tax rate.... If the same security is held for 366 days or longer at a profit, it is called a long-term realized game when sold, and taxes are capped lower. p126 PJK: need to think about this one in my stock trading account. Also need to check my tax statement from last year to verify the cost differential identified by the author.
- “... Investors see an “expense ratio”, which is quoted as a percentage of invested assets and includes the costs of investment management, legal, accounting, auditing, and even advertising and promotion. Yet the cost of advertising and promotion includes a kickback to the broker and the brokerage firm. p38 PJK: Something to consider in any long term investment; the broker has to earn money.
- This is not so for the typical mom and pop investor, who benefits from less activity, not more, occurring in their account. p65 PJK: another interesting bit of wisdom, especially when considering tax implications as per the last of my excerpts below.
- A plate of index funds wouldn't generate much for the firm. That's why they put end dates on products and design products offering the chance at excess return. My boss would say, “The last thing you want in your clients is accounts are dormant assets.” Brokerage firms produce internal reports on dormancy to identify “opportunities”.... Generate transactions so the firm can earn Commission revenue. Ultimately, keep the pot stirred. p79 PJK: once again, something to think about if a broker calls you.
- If a profitable security is held for less than 366 days before being sold, it is deemed to be a short-term realized gain and is taxed at the investor's ordinary income tax rate.... If the same security is held for 366 days or longer at a profit, it is called a long-term realized game when sold, and taxes are capped lower. p126 PJK: need to think about this one in my stock trading account. Also need to check my tax statement from last year to verify the cost differential identified by the author.
May 13, 2021
Advice that works
When I accumulated enough money to invest, mI started working with an advisor that a friend recommended. After a few years, I realized I was paying high fees for investments that were more profitable for my advisor and his firm than for me. My situation was exactly as described in this book. If I had access to the knowledge shared by the author, I could have saved myself several years of poor performance. I stopped working with that initial advisor and have been with a fiduciary advisor ever since. My investment goals have been met and I have been able to retire without having to be concerned about my financial situation. I highly recommend that anyone with funds to invest but little market knowledge read this book and follow its guidance.
When I accumulated enough money to invest, mI started working with an advisor that a friend recommended. After a few years, I realized I was paying high fees for investments that were more profitable for my advisor and his firm than for me. My situation was exactly as described in this book. If I had access to the knowledge shared by the author, I could have saved myself several years of poor performance. I stopped working with that initial advisor and have been with a fiduciary advisor ever since. My investment goals have been met and I have been able to retire without having to be concerned about my financial situation. I highly recommend that anyone with funds to invest but little market knowledge read this book and follow its guidance.
June 10, 2021
This really made me think about how I have been doing things financially. It has a little edge to it that made me think it had a little bit of an axe to grind, but that was probably the inspiration
to be so open about what goes on. He does a great job of explaining the various terms thrown around in finance. Definitely worth reading if you are planning on or already are investing in the market. Really gets you thinking about what might be best way to do it for your situation.
to be so open about what goes on. He does a great job of explaining the various terms thrown around in finance. Definitely worth reading if you are planning on or already are investing in the market. Really gets you thinking about what might be best way to do it for your situation.
May 4, 2021
Great Read
The book shows how the stock market is very convoluted. It shows the need for amateurs to have a professional guide during these roller coaster markets. It gave me a great awareness of the manipulative tactics that are used to entice inexperienced investors to foolishly spend their investment dollars.
The book shows how the stock market is very convoluted. It shows the need for amateurs to have a professional guide during these roller coaster markets. It gave me a great awareness of the manipulative tactics that are used to entice inexperienced investors to foolishly spend their investment dollars.
Read
June 12, 2024DNF. Useful if you are invested with a broker or such who doesn't have fiduciary responsiblity to look out for your interests.
Displaying 1 - 6 of 6 reviews