First off, I would like to thank the author Danielle Park for furnishing a copy of her book for review. A lawyer and money manager, Ms. Park likens investing, which can be remarkably volatile and full of risk, to lit dynamite and a money manager’s role to that of a professional dynamite juggler. There is a lot to like in her warning to investors to beware the advice given by brokers, analysts and the media, who have a vested interest in being perpetually bullish and mutual fund salespeople in advocating a buy-and-hold approach in all market conditions.
The author contends that market timing (“the buying and selling of equity holdings within the broader context of the roughly 4- to 5-year business cycle”) is superior to a passive approach to investing. She explains that her approach in equities is to strategically enter and exit different sectors at different stages of the economic cycle.
While I found myself agreeing with most of Ms. Park’s diagnosis of the investment business and its consumers, I found little to challenge the idea that most investors are best served by a “buy-and-hold, keep expenses ultra low” approach to investing. First, there is nothing in the book to show the superiority of market timing over indexing. Even if I bought the idea that market-timing strategies are superior, I doubt that average investors would be able to time successfully.
Despite my reservations, I found myself enjoying the book as it made me think about a diametrically opposite approach to investing than my own. Section III, in which the author discusses risk (“by its very nature an unknown”), leverage (“a high-risk strategy for real-life people”) and income (both employment earnings and investment returns) makes the book worth reading. The soft cover book is available for $16.02 from Amazon and for $16.68 from Chapters (non-affiliate links). You may also want to check out reviews by Jonathan Chevreau and Canadian Dream and the author’s own blog.