Fortune for a lifetime

Kamya Jaiswal        Print Edition: March 6, 2008

Lifespan investing
Lifespan investing

Price: Rs 250
Pages: 208
By Clifford Pistolese
Published by Tata Mcgraw Hill

Know your investments. This is the simplest yet biggest learning from the young investors profiled in the previous pages. Most of them don’t invest on impulse or follow the crowd. Instead they believe in doing their homework. Clifford Pistolese fully backs this investment philosophy.

For amassing a fortune that lasts a lifetime, you have to invest right at all stages of your life. And since equities give the best returns in the long term, build your portfolio around them. This is exactly what he does in his book with the telling title Lifespan Investing. For every age group (divided into groups of five years starting from 25 years), he suggests portfolio compositions depending on whether the markets are bullish, bearish or range-bound.

This is a unique approach to investing and might mislead readers to think that the author does not have a long-term perspective in mind. However, Pistolese does not tell readers to alter portfolios according to market movements. He suggests rebalancing portfolios to take an aggressive or defensive stance. So, for investors in their 20s and early 30s, the investment advice is not very different.

But simply recommending penny stocks for a particular age group is of no use if you don’t know how to select the winners in the category. Pistolese teaches you how in the first two chapters dedicated to fundamental and technical analysis. From evaluating stock prices to studying “double bottom” graphs, there is a lot to learn.

Pistolese’s portfolio for age 20-30

Bull market

Objective: Superior capital gains
Risk levels: High for stocks, lower for funds
Investment options: Small- and mid-cap stocks, equity funds

Bear market

Objective: Preserve capital
Risk levels: Very low for money-market fund, no risk for zero-coupon bonds
Investment options: Bonds, fixed deposits, debt funds

Investment options suggested by Money Today following Pistolese’s principle

There are investing nuggets scattered throughout the chapters which are important for all investors. So Pistolese might talk about selecting stocks that give high capital gains for investors between 40-45 years but even a 32-year-old will benefit from it. What makes the book really stand apart from its competitors is its manual-like narrative format.

So, when there is a recommendation to check Yahoo Finance for making a stock comparison, you are told which link to click on, and which chart to scroll down to. If you thought it couldn’t get easier, there is a list of stocks and funds that meets the investment criterion recommended for every age group.

Even while explaining concepts, the author has used actual data of companies. The irony is that it is these two strengths of the book that limit its appeal for Indian readers. All examples are of American stocks, and websites. Hence, gleaning the principle behind the suggestions is fruitful, but tedious.

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