If you live in the UK and are looking for a ‘How to manage your investments’ book then you can’t do better than Smarter Investing by Tim Hale.
Now in its fourth edition, Smarter Investing remains as on-point as ever for anyone looking to successfully navigate the investing swamp.
In some ways investing resembles a ‘Choose Your Own Adventure’ exercise.
Many paths lead – well, if not to death, then to painful mistakes, regret, and lost time and money. And most of us lose a few lives as we find our way through.
But Smarter Investing is effectively a cheat sheet that maps out the best route forward in advance.
Follow Hale’s guidance and you stand an excellent chance of avoiding the perils that beset so many on their investing quest.
You could go buy the book right now. But why not read our Smarter Investing review first and feel even more confident in your purchase?
Hale’s prescription is a comprehensive passive investing strategy. This was near-heresy in the UK when the book’s first edition arrived – only a few months before Monevator – in 2006. But now the passive approach is mainstream and recommended by heavyweights like Warren Buffett.
However two things still set Smarter Investing apart as the go-to-book for UK investors:
The coherent way Hale lays out the investing journey, from underlying strategy to product picks
The level of detail. Enough to help you understand why this is the way ahead. Not so much that it’ll overwhelm a diligent newbie
Hale’s approach takes time to build, but in doing so he cogently explains:
What good investing looks like, what it can achieve, and what the risks are
Why passive investing works
Why active management and big bets aren’t likely to pay off
How to develop your strategy and asset allocation
How to calculate how much to invest, in what, and for how long
The investing behaviours to cultivate and, perhaps more importantly, those to avoid
By the end of the book, you’ll have a sound idea of what you’re up against, what needs to be done – and even whether you’d do better to outsource the work to someone else.
Our Smarter Investing review: a hearty thumbs-up
Part of the reason Smarter Investing is invaluable to a DIY investor is because Hale clearly describes the many choices you’ll have to make, and how to think about resolving them.
So while the text may be dry, it’s resolutely evidence-based, rational, and practical.
To that end, Hale does us DIY-ers a great favour by drafting in more rules of thumb than a multi-armed manga monster could muster.
Harvested from the crowd-sourced wisdom of the financial planning industry, these time-honoured heuristics serve far better than magical thinking or over-complicated solutions posing as science.
Indeed, Hale’s experience in financial planning means that reading (and rereading) this book is akin to having your own advisor dispensing eternal investing gems for just £20 all-in.
If in doubt, break Hale out
Because it’s so process-driven, Smarter Investing’s value lies more in having it to hand as a reference manual, rather than in its power of revelation.
Even the most dedicated passive investing monk can be easily blown off course by events, hype, and this-time-it’s-different rubber-necking.
But sitting down with Smarter Investing enables you to recalibrate and remind yourself that you’re most likely to succeed by keeping things simple and doing the basics right.
Use it to reset yourself to factory settings whenever you find your mind or portfolio is cluttered up with investing clag.
Smarter Investing 4th edition changes
I think the fourth edition is notably stronger than the third. It contains more illuminating examples, pithy quotes from investing greats*, and expanded explanations of key points.
The section on investing philosophy is much improved.
There’s also an excellent new section on Sustainable Investing.
Hale gently breaks the news that you’re unlikely to save the planet through your portfolio. But he brings us back to burning Earth without underplaying the importance of action, or leaving us despondent about our chances of making an impact.
In this, as throughout the book, Hale focuses on the art of the possible, and leaves his readers better informed about how to achieve their goals.
That said, I don’t think you need to read Smarter Investing 4 if you’ve got one of the previous editions.
Much of the material, structure, and guidance remains unchanged because, like passive investing itself, the book has stood the test of time.
If DIY investing were taught in schools then Smarter Investing would be the core textbook. Indeed because it’s your money on the line you’ll surely be more motivated than any class of 16-year olds.
Moreover, some problems are just better solved with a good book. I believe embarking on your investment journey is one of them.
The Internet is all very fine – please stick with us – but it’s endless, fragmentary, and polarised.
Hale’s work, meanwhile, is less than 400-pages, systematic, focussed, and on a singular mission to equip you with the investing values and knowledge you need to thrive.
I heartily recommend it. It’s hard to imagine a more useful or empowering book for UK investors.
Take it steady,
P.S. If you’re fixing your financial life for the first time then I’d pair Smarter Investing with How to Fund the Life You Want. The latter offers a bigger picture view of the UK’s personal finance universe. The former is more your investment 101 course.
P.P.S. The first reader comments below will refer to our earlier review of a previous edition. We’ve kept them for posterity. Check the dates if in doubt.
*Note: What The Accumulator has not mentioned in his Smarter Investing review is that the fourth edition also features an endorsement written by him. I’m sure TA is modestly not counting that in the improvements column!
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