The Intelligent Investor By Benjamin Graham Summary
Michele Firmasyah
Important Note: The original revised edition of The Intelligent Investor was published in 1973. I prefer a copy with modern commentary and references (I am using the HarperCollins Revised Edition 2003 with commentary by Jason Zweig).
This is a fundamental concept in his approach, and drawing a line between intelligent investing activity and speculation is a recurring theme. I explore this in more detail in this post. According to Graham investment consists of three equal parts:
The decision about how defensive/enterprising your approach is should be based not on your appetite for risk, but rather on your willingness to put time and effort into your portfolio.
Later in his life, Graham praised index funds as the best choice for individual investors, as does Warren Buffett (p.249), that said, the chapter still explores mutual funds, and the things to look for when choosing one:
This chapter deals with how to seek and select help with your investments. The major caveat with seeking a full-time financial adviser is that you need at least $100,000 to invest (p.277). Until you reach this point, Graham suggests low-cost index funds.
That concludes the LLB book summary for The Intelligent Investor. As usual, we must state that we are not licensed financial advisors, and none of what we write here should be taken as financial advice.