As one of the co-hosts for Morningstar’s The Long View podcast, I get to read a lot of great books about retirement, personal finance, and development of modern finance.
The Architecture of Wealth: The Art and Science of Portfolio Construction by Andy Clarke, Nelson Wicas, and Ganesh Suntharam
The Architecture of Wealth combines financial theory, behavioral finance, indexing, active management, and institutional investing experience to explain how better portfolios are built. It was originally envisioned as a textbook for undergraduates studying finance and investment management, but it’s also a clear, comprehensive overview of the past 75 years of academic theory about investing that’s accessible enough for serious do-it-yourself investors.
The authors also share their insights from working with Jack Bogle and decades of research on diversification, indexing, active management, and behavioral bias. Among other highlights, the authors argue that index investing is not truly passive. Running an index fund requires active decisions around trading, cash flows, and implementation. They describe some of Vanguard’s major milestones and contributions, such as the work Gus Sauter did to implement sophisticated forecasting and trading techniques, helping Vanguard’s index funds minimize tracking error and even occasionally outperform their benchmarks.
The Making of a Permabear: The Perils of Long-Term Investing in a Short-Term World by Jeremy Grantham, with Edward Chancellor
Part memoir, part market history, and part investment philosophy, The Making of a Permabear chronicles Jeremy Grantham’s evolution from a young investor into one of the world’s best-known market skeptics. The book explores the recurring cycles of speculation, bubbles, crashes, and investor overconfidence that have shaped financial markets throughout history.
Drawing on more than five decades of experience managing money and studying market history, Grantham argues that while innovation and economic growth ultimately create wealth, investors repeatedly overpay for exciting narratives and underestimate the importance of valuation. The book examines major market episodes including the Nifty Fifty era, the Japanese bubble, the dot-com boom, the global financial crisis, and the recent surge in US growth stocks.
The book also broadens beyond investing to address topics such as climate change, re
Investing in America: The Rise of a 250-Year Bull Market by Meb Faber
Investing in America examines 250 years of market returns, economic growth, technological innovation, entrepreneurship, and wealth creation. Drawing on centuries of market data, Meb Faber argues that the defining characteristic of US capital markets has been extraordinary resilience. Despite wars, depressions, inflation, political upheaval, banking panics, and market crashes, long-term investors who stayed invested in productive assets have consistently been rewarded.
The book uses financial history to challenge the idea that current market risks are unprecedented. From railroads to automobiles, and from the internet to artificial intelligence, Faber shows how periods of transformative innovation have often been accompanied by speculation, volatility, and occasional bubbles. While many of the companies leading these revolutions ultimately fail, the broader economic benefits frequently endure and create <a >
