Book Review: The Intelligent Investor by Benjamin Graham by Kenton Hockett Oct, 2023

A behemoth in the retirement investing and mutual funds space, Vanguard also offers some competitive features with its custodial accounts. There aren’t any opening deposit, maintenance, or account transfer fees, and you can automate transfers from both your bank account and other Vanguard accounts. More advanced users may be frustrated by the level of financial advice available to them and the lack of customization they can do on their portfolios. Unlike Wealthfront or Axos Invest Managed Portfolios, you can’t add ETFs to your portfolio or tailor your holdings to environmental, social, governance (ESG) or socially responsible investing (SRI) standards.

  • The Intelligent Investor, by Benjamin Graham, is probably the most important and influential value investing book ever written.
  • In addition, any income earned over $2,500 is taxed at the parent’s income tax rate.
  • As with most financial newsletters I’ve come across, there are different price points you can join at.
  • The premium account incurs a $300 initial setup fee and a recurring $30 monthly subscription fee.
  • Once you’ve read those, the newsletter (“Issues & Updates” link) and model portfolio (“Portfolio” link) are the main pages of the member site you’ll likely visit if you join.

With Schwab Stock Slices, you can invest in fractional shares as long as you meet the $5 minimum requirement. And as with all custodial accounts, won’t have to worry about any contribution limits. Parents and guardians might also consider Schwab’s custodial IRAs (you can open these as a traditional IRA or Roth IRA), 529 college savings plans, and education savings accounts (ESA). I was wondering if there was a good place to find good quality, insightful analysis of the Australian share market price action produced on a daily or weekly basis. I’d just like something that could explain technical or fundamental drivers of recent performance and likely implications going forward on an intermediate timeframe.

Book Review: “The Intelligent Investor” by Benjamin Graham

It’s a long-term approach that helps to guard against substantial risk and error. The intelligent investor is aware of the lengths to which top executives and accountants occasionally go to make themselves very rich at the expense of the company and its shareholders. There are plenty of ways that financial reporting and “creative accounting” has made companies seem more financially attractive than they are. A bargain issue is a stock or bond that seems to be worth at least 50 percent more than what it’s selling for. To work out if an issue is a bargain, you must first attempt to estimate whether the stock’s future earnings outweigh the costs of the issue currently causing it to be undervalued.

  • Graham also advocated for companies paying dividends to their shareholders, rather than keeping all of their profits as retained earnings.
  • For example, if you have plenty of time, are competitive, and enjoy an intellectual challenge, you might make for a better active investor.
  • Many of Graham’s investment principles are timeless—they remain as relevant today as they were when he penned them.
  • Sitting on do-nothing cash may be good for investors who aren’t disciplined about deploying their cash reserves, especially when the market is in a down cycle.

With V representing the intrinsic value of the stock, EPS as the trailing 12-month earnings per share, , 8.5 is the price/earnings ratio of a zero-growth company, and g is the company’s long-term growth rate. One of Graham’s key contributions was to point out the irrationality and group-think that was often rampant in the stock market. Thus, according to Graham, investors should always aim to profit from the whims of the stock market, rather than participate in it. His principles of investing safely and successfully continue to influence investors today. TD Ameritrade – Product Name Only offers a vast range of accounts for youth. These include its UGMA/UTMA accounts, Coverdell Education Savings accounts, and 529 plans (TD Ameritrade is no longer offering 529 plans to new clients).

However, as you can see, REITs can be just as volatile as high growth stocks when the macroeconomic environment changes. First, I didn’t find the marketing to be too overhyped, which is always something I take into consideration before recommending something. There were a couple of upsells leading into the member’s area, but nothing overly pushy (compared to most services, at least). It’s a bit early for me to tell if the Intelligent Income Investor service is one I would actually recommend, but so far, it’s one of the better services I’ve come across. Furthermore, he is still recommending these companies at the “buy up to” price, which you get to see as a member. So they are still very much relevant as I write this, regardless of when they were first recommended.

The Intelligent Investor’s author starts out by giving various examples of why there are stocks that are undervalued in the market place. A company may be undervalued but you still need to make sure that there is no impact to the earnings and revenues. The goal is to find companies that are financially sound but out of favor and undervalued. This means that you can continue investing with regularity, patience, and calm, as you gradually work your way towards your long-term financial goals.

Stock selection for the enterprising investor

UGMA accounts (formerly known as Uniform Gift to Minors Act accounts) can hold cash, stocks, mutual funds, bonds, and other investments. Alternatively, UTMA accounts — also known as Uniform Transfers to Minors Act accounts — allow for alternative assets like real estate, fine art, intellectual property, and precious metals. The best intelligent investor share advisor review custodial accounts are accessible and low-cost, user-friendly platforms for parents/ guardians to invest funds on behalf of their children/dependents. Keep in mind that funds in these accounts must be used for the benefit of the child. Tax-loss harvesting is one of the selling points of having a robo-advisor manage your portfolio.

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This false record-keeping caused its stock to drop a considerable 16 percent in a single day. When the company returned to its former standing, they’d made quite a bit of money. Ultimately, Graham states that the only thing an investor can be sure about when attempting to forecast future stock returns, is that they will probably turn out to be wrong.

Who Should Choose Wells Fargo Intuitive Investor

You’ll find more educational book reviews, stock analysis, and financial advice here. NerdWallet’s comprehensive review process evaluates and ranks companies that provide financial planning services online or connect users to a financial advisor. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs. Schwab Intelligent Portfolios Premium clients get access to a team of CFPs, receive a financial plan and get access to interactive planning tools.

After choosing either a taxable brokerage account or a tax-advantaged retirement account, Schwab Intelligent Portfolios presents you with a recommended portfolio allocation. If you’re shopping for a robo-advisor, Schwab Intelligent Portfolios offers a great way to pay as little as possible for automated investment management. To be a smart investor, you need to ensure that you never lose the majority, or all, of your money. To give yourself a buffer, Graham suggests that you refuse to pay too much for an investment and, therefore, minimize the chances of your wealth completely disappearing. As he has repeated throughout the book, the greatest risk to our financial health isn’t the stocks, but ourselves.

I found a very good analyst for the US share market who does independent research on historical stock market price and sentiment trends and gauges the risk of a pullback. However, it would be nice to find something similar for the Aussie market. Wells Fargo Intuitive Investor provides a convenient, relatively advanced platform for those already banking or investing with Wells Fargo. Its tax-loss harvesting and smart beta ETF options help it stand out in an increasingly crowded field of traditional financial institutions trying to break into the robo-advisor scene. While this kind of information is undoubtedly helpful for new and inexperienced investors, it’s not the level of financial advice more sophisticated investors may seek as they embark on financial planning.

Can a parent withdraw money from a custodial account?

We’re such strong believers in Graham’s teachings that if you join today, we’ll send you a free copy of The Intelligent Investor as part of your membership. If you invest based on those four key principles, the odds are quite high that you’ll do fine. All in all, The Intelligent Investor is a superb reference book, and one with which every investor should be acquainted.