[.ca] The Investment Zoo: Taming the Bulls and the Bears (ISBN 2894722591)

The Investment Zoo:
An excellent book for the new or experienced investor. The suggestion that one should essenially remain in stocks. Even in retirement,Stephen A Jarislowsky reccomends that one should continue to keep 25% in stocks especially in time of inflation. In the long run, he suggests to go for long-term growth and top-quality stocks. Finally, be patient and be a long time investor. When fortune smiles, remain simple in your lifestyle.

Wonderful advice, but the devil's always in the details:
Stephen Jarislowksy is undoubtedly one of the great Canadian investors and ardent defender of shareholder rights. He is blessed with a keen ability (and the temperament) to pick blue chips at a reasonable price, and has employed this ability to serve the clients at his boutique investment firm very profitably over the long term. Also, let me say I do not doubt his goodwill in imparting what most people (myself included when I first read his book, which I still find to be a breath of fresh air given all the rubbish out there) will regard as valuable guidelines for picking and investing in solid non-cyclical blue chips offering good long term potential, leading to enhanced returns over the market. I would embrace and attempt to apply this advice if I believed I could beat the market over the long haul. However, the odds are against MOST investors being able to do this in the long term (by which I mean 20 years and beyond). His view that earning the market return just won't help you achieve financial independence and a comfortable retirement, and that to earn 14% on your porfolio over the long term is challenging but achievable, is a seductive but dangerous notion. It is one that can very easily lead to frustration, and worse, long term underperformance relative to the market return. As they say, reversion to the mean is one of the most powerful forces, and outperforming the market over 5 years may not be very meaningful. In the long term, particularly after transaction costs and taxes, beating the market is a very tall order. Unless you have a very smart friend or benevolent relative (or know Stephen Jarislowsky well enough!) who has the ability to outperform the market in the long term (i.e. he or she has demonstrated this consistently over the past 15 years), and can vet your picks before you invest, you will in all likelihood be better served investing (not trading) in low cost, tax efficient classic Index Funds. In this regard, I would urge readers to instead try one of John Bogle's books on Index Fund investing, such as "The Little Book of Common Sense Investing".