Index Investing: A Low Cost, Low Risk Strategy to Investment Success

Welcome to the mysterious world of equity market, which is not so mysterious after all! Most investors get it wrong when it comes to understanding the nuances of the equity market. It is not because they are ignorant or lack the requisite skills to understand the factors affecting this market, but mainly because they get misleading information from market players and financial intermediaries. Consequently, these entities thrive and flourish, leaving the investor wringing his hands, wondering where all the money has gone. No more lies! This book is your window to the equity market from a completely different perspective and earn your fair share of stock market return.

Table of Contents:
Preface Acknowledgements PART I: The Theory of Investing Do Your Homework! The Act of Faith No Pain No Gain Measuring the Beast The Drunkard’s Tale Floored by the Factors PART II: The Psychology of Investing Do You Blink or Think? Oozing with Overconfidence Loss and Gain: Not the Same Trampled by the Herd The Folly of Forecasting PART III: The Business of Investing Welcome to the Jungle The Parrot’s Prophecy The Curious Case of Chimpanzees Death by a Thousand Cuts The Mirage in the Desert The Grand Illusion The Wolf in the Sheep’s Skin Smitten by the Hype and the Beauty PART IV: The Solution The Triumph of Indexing Words of Wisdom

About the Author :
Abhishek Kumar is a financial consultant with one of the world’s leading valuation firm at its San Francisco office where he looks after the valuation of derivatives and other complex securities. Earlier he worked as a corporate banker for nearly six years where he helped clients raise debt to fund their business operations and capital investments. A proponent of MPT and a believer of passive investing school of thought, Abhishek is a critic of conventional ways of managing money which he says have been designed not to help the investors but the financial institutions and the intermediaries which reap benefits by exploiting the ignorance of people. His earlier books Master Your Money, Master Your Life and The Richest Engineer have been well received. Abhishek has earned a Master of Financial Engineering from the University of California, Los Angeles, an MBA from Indian Institute of Management Kozhikode and a BTech in Electronics Engineering from Indian Institute of Technology (BHU) Varanasi.  

Review :
If you want to learn the lessons of Nobel Prize winning economists such as Markowitz, Fama, Kahneman, Thaler and Shiller on investing in the stock market, then Abhishek’s book is your best bet. The book will not only teach you the scientific and behavioural theories which are essential to creating a robust portfolio, but it will also take you to a real-world tour of Dalal Street and show how you can bypass most of the financial predators to come out as a real winner. With Index Investing, Abhishek has made a bold attempt to bring out the ugly truth of the Dalal Street. A truth that has been gloriously guarded by the financial intermediaries such as stockbrokers, fund managers and marketers. Like Yin and Yang, Abhishek has meticulously balanced his book to be simple and straightforward for common investors as well as thorough enough to be featured in the bookshelves of the academicians. Index Investing is an eye-opener for both the common and self-proclaimed sophisticated investors on why investing in the equity market is not what they have been made to believe and why their money doesn’t grow as advertised by the industry. The book takes a scientific approach with references from academia including the works of Nobel laureates and clearly shows how the financial system works and who is the end beneficiary. If you want to avoid the investment traps and work towards your own financial wellbeing, you must read this book. If you are an investor and didn’t know about the inherent conflict of interest between those who invest their hard-earned monies and the people who manage those investments, then you will do a great benefit to yourself by reading this book. Index Investing which is a low-cost, low-risk and tax-efficient approach to stock market investing is one solution for which your kids and grandkids will ever be thankful to you. Be it the unguided common investors or misguided experts, walking through the labyrinth of the equity market is always full of conceptual and emotional challenges. Abhishek takes readers on an eye-opening journey of this mysterious world busting many myths with lucid concepts, sound reasoning and practical analogies. Readers will love the intellect of the book and will thank him for its easy practical solution. Indian mutual fund industry has been up and running for over 30 years and it is for the first time that a book has been written which brings out its real picture. No sales pitch, no promotion and no false promise. Only the reality which has been kept hidden till now by the gatekeepers of the fund industry. As with every business, the investment management business is not a story of golds and glories. At the bottom of this industry, there is a truth that is ugly and brutal. The genius of Abhishek is that he has brought out this truth in a spectacular fashion and great detail. More importantly, he has  backed all his inferences with empirical evidence and researches done by noted academicians. If you want to avoid the snares that lurk in money management, and save yourself lots of money, you must read this book.