Market Neutral Investing: Build Consistent Low-Risk Profits by Creating Your Own Hedged Portfolio

By Eric Stokes

Book Overview

The stock market still intrigues people, but shell-shocked individual investors have learned to be more savvy and realistic with their investments. There is no way to eliminate risk when stocks... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0793194148
• ISBN13: 9780793194148
• Release Date: October 2004
• Publisher: Kaplan Publishing
• Length: 272 Pages
• Weight: 0.85 lbs.
• Dimensions: 9.0" x 0.5" x 6.0"

Customer Reviews

Great Introduction to Market Neutral investing

This book was a good introduction to market neutral investing. After reading it, I certainly have a good appreciation of what is involved. I can't give it 5 stars however, the reason being when you short a stock the individual investor will be paying margin interest (etrade at time of writing this review was 10.24% <$50K for example). Margin interest isn't taken into consideration in the book, in fact I don't believe it was mentioned once. That's crazy to me. If you short $50K worth of stocks, and go long $50K of stocks for 1 year, and your margin interest is 10%, your combined long/short portfolio is going to have to return 5% to even breakeven. The fact that margin interest isn't mention in the book disappointed me. But like I said, this is a great book as an introduction to market neutral investing, it's easy to follow, and well written.

Great book

I thought this was a great book. It simplified the concept of investing 'short' in conjunction with a standard stock portfolio to reduce risk, without sacrificing overall returns. In todays market, this certainly sounded attractive to me. Not only conceptual, but actual information on how to easily create and trade a short strategy. Much easier than I expected to implement this kind of advanced stock investment strategy.

Insightful !

Any investor disposed to pick stocks should read this excellent short introduction to the esoteric discipline of market neutral investing. Author Eric Stokes provides a better introduction to investment risk than the usual explanations found in most popular investing books. He also discusses a variety of ways to use the underlying principles of market neutral investing without becoming a full-fledged market neutral investor. Indeed, the quantitative capabilities and research skills necessary to run a market neutral portfolio are far beyond the scope of all but the most well-staffed investment firms. But a simple strategy like purchasing shares in an index inverse fund to hedge the risk of a long index fund could make sense for many investors. To learn if this strategy is right for you, we recommend reading this book.