Book Review: The Little Book of Safe Money

The Little Book of Safe Money (2010) by Jason Zweig

I enjoyed reading Zweig's chapter commentaries in The Intelligent Investor, so I decided to read this book afterward. Its purpose is to help investors keep their money safe, which is more about not losing money than it is about making money. Among other things, Zweig recommends that investors:

• Avoid excessive risks
• Do not invest money they cannot afford to lose
• Be diversified and monitor the liquidity of their assets
• Never assume any investment is guaranteed
• Avoid investing in leveraged ETFs and commodities
• Be aware of their cognitive biases
• Be on the lookout for fraudsters and opportunities that sound too good to be true

Most of what he writes is common sense that I have encountered numerous times elsewhere, so I did not learn much from this book. However, for completely naive investors or those who were severely burnt in recent market declines (these two groups appear to be the intended audience), the book may help them devise lower-risk investment strategies by emphasizing what not to do.

Note: I read this book in April 2012.