Month: April 2012

One of the great ‘disadvantages’ to beginner investors is how to put what they hear and see in the news or what they are told by financial sales staff into context.  One solution to get that context is through education.  While most people would probably agree that taking the time to learn about investing is important they simply don’t have the time to do so or know where to start or who to trust.

It is through that lens that Danielle Park’s book, “Juggling Dynamite: An insider’s wisdom about money management, markets and wealth that lasts” is probably one of the most valuable starting points for Canadian retail investors.

Unlike some books about investing that focus solely on money, Juggling Dynamite takes a thoughtful and uncomplicated look at building wealth and understanding that getting money is important but keeping money is even more important in the long run. According to Danielle Park, there are no shortcuts or “extreme makeovers”, but rather a daily commitment to learning and sound decision-making. Specifically, the keys to successful investing and wealth management rely on having the patience and discipline to both identify and wait for the right opportunities to present themselves.

The well-written and matter-of-fact style of this book is a breath of fresh air in a landscape stuffed with sugar-coated sales pitches and fantastical claims about the benefits of investing in stocks, mutual funds and many other investment vehicles.  Because of her experiences within the financial industry, Danielle Park is uniquely able to provide an “insider’s view” of how the investment industry is designed to work to separate investors from their capital.  For example, Danielle Park writes

Waiting for the right investment at the right price is not a strategy well received by an investment industry paid to promote transactions. Most investment professionals are paid to come up with buy ideas. Fund managers are paid to buy things, not to sit in cash. This is the bias inherent in the system. (p56)

While providing a fascinating and much needed look into how investments are presented to the public, this book also provides a great overview of how market and business cycles influence when being in certain investments such as stocks, ETFs or mutual funds makes more sense and when it does not.  This is a powerful piece of insight that runs contrary to much of the financial advertising and “conventional” buy-and-hold wisdom, however as Danielle Park concisely points out “To regular folks, 5-, 10-, and 20-year cycles matter most in their lives. Few people invest all their money with plans to look at it fifty or more years down the road” (p32)

Even though the financial industry is quick to point out that “past performance doesn’t necessarily guarantee future results” stepping into a market without having first taken a look at market cycles and historical behavior means that a different phrase will probably apply, namely “those that fail to learn from history are doomed to repeat it”. As a great irony and first lesson of the value of history, Juggling Dynamite was published in 2007 just ahead of the greatest financial disaster of this generation.  Too bad more people didn’t read it then.

 

For more information about Danielle Park, you can visit her website at www.jugglingdynamite.com

Check out our interview with Danielle Park here

You can also purchase this book online via the link below:

 

To read five other reviews of this book you can click here.