One of my core tenets of investing success when it comes retirement strategies can be summed up in the title of Jeremy Siegel’s classic book: Stocks for the Long Run. This is a great read for anyone looking to get a good dose of data on why owning a properly allocated basket of diversified equities is so much wiser for the long-term investor than, say, owning a portfolio of fixed-income investments.

As with any non-fiction book, all you need to do to get the main substance of the entire book is to flip to the last couple pages. So, I will recite the last couple paragraphs here from Stocks for the Long Run, as I feel these to be the best paragraphs in the book anyways.

Excerpt from pg. 369, Stocks for the Long Run by Jeremy J. Siegel, 2002, 3rd edition: 

Poor investment strategy, whether it is for lack of diversification, pursuing hot stocks, or attempting to time the market, often stems from the belief of investors that it is necessary to beat the market to do well in the market. However, nothing is further from the truth. The principal well-diversified portfolio of common stocks have not only exceeded those of fixed-income assets but also have done so with less risk. Which stocks you own is secondary to whether you own stocks, especially if you maintain a balanced portfolio. Over time, the historical difference between the returns of stocks and the returns of bonds has far exceeded the differences in returns among well-diversified all stock portfolios.

What does all this mean to the reader of this book? Proper investment strategy is as much a psychological as an intellectual challenge. As with other challenges in life, it is often best to seek professional help to structure and maintain a well-diversified portfolio. If you should decide to seek help, be sure to select a professional investment advisor who agrees with the basic principles of diversification and long-term investing that I have espoused in these chapters. It is within the grasp of all investors to avoid the pitfalls of investing and reap the generous rewards that are only available in equities. 

People often ask me what books to read to get a better understanding of the stock market, this is one I recommend. Jeremy goes all the back to the 1800s and on up to the early 2000’s with his historical data. He does a great job of distilling it all down to basic principles like the ones in the paragraphs above.