Bobby Monks * Portfolio * August 4, 2015 * 192 Pages
In Uninvested, Bobby Monks argues that the financial system is seriously dysfunctional. Especially when it comes to investing for retirement, most people are operating in the dark. They don’t understand where their money is going, they don’t know how much they are paying in fees, and they aren’t sure if they are invested in respectable companies. And, to top it off, their money managers–who are supposed to be giving them wise and unbiased advice–may not necessarily have their best interests in mind.
Monks paints a fairly bleak picture, giving plenty of evidence showing how uninformed investors are getting taken advantaged of by greedy bankers. I thought his perspective on mutual funds–specifically, how investors see mutual funds as a solution to the complex mess of saving for retirement, despite the fact that many don’t really understand what they are investing in–was interesting and unique. Most people praise mutual funds (and index funds, too) like they are the gold standard, so it was nice to see another perspective.
Honestly, I was completely on board with Monks until the very end. Unfortunately, when it came time to DO something about the problem, Monks couldn’t deliver. His solutions are way too basic and nebulous to be useful, and, worse, they don’t make sense. In addition to knowing and understanding the contents of your portfolio and what you pay in fees, etc., Monks encourages investors to buy stocks directly from individual companies that they believe in and are familiar with–and no more than ten at a time. While I, of course, agree that investors should be familiar with their investments, I don’t see how investing in a handful of companies that “share my values” is going to get me through retirement. I may like baseball cards and organic skin products, but that doesn’t necessarily mean that Topps and Honest Company are going to be the aggressive growth companies that will sufficiently grow my nest egg. And God forbid one of them goes under…
Moreover, one of the great benefits of mutual funds is that people like me–people who have a little bit of money, but not a lot–actually have the option to access and invest in solidly growing, well-founded blue chip companies that otherwise would be out of my price range and unavailable to me. No, I don’t want to be fleeced by money managers and their fees, but I still see investing in index funds as an okay way to build my retirement accounts.
Ultimately, I enjoyed this book up until the end. Monks laid out such a great case for how messed up the system is, but then went nowhere with it–not a tangible solution in sight. As a result, I finished the book feeling dissatisfied and slightly depressed. I will continue to work to understand my portfolio and prospectuses, yes, but, for right now, I’m sticking with my index funds.