A portion of most newscasts and numerous programs on cable news are dedicated to investments: in stocks, bonds, real estate and other assets. How many of us who see these numbers really understand the principles and practices underlying these transactions?
Stephen H. Archer’s work, subtitled aptly “A Primer for a Beginning Investor,” assumes that readers know nothing about the stock market, the economy or investing strategies. He explains complex financial matters in simple ways, invoking everyday examples.
Archer has both a bachelor’s and master’s degree in economics, a Ph.D. in finance and is past president of the Financial Management Association, among other distinctions. His book begins with an overview of the stock market that explains its basic principles and the macro-economy at about a high school graduate level. Archer then discusses how the human mind influences investment decisions. Next, he briefly reviews different types of investments such as gold, futures, or real estate, and, finally, offers some tips on personal finance. Throughout, Archer assumes that all decisions are selfish, that people make choices that further their own goals, and he identifies pitfalls rooted in human psychology that beset investors.
Archer is at his best when he is presenting the principles of investing in simple terms. He has a knack for making complicated financial concepts easy to understand. When he stays within this field—offering concise overviews of such topics as “portfolio management” or “stock options,” for example—his contributions are superb. His precision and knowledge of the subject matter are impressive. Where he pivots away from his expertise to give philosophical disquisitions on such issues as “diversity” and “inequality,” the book is less convincing. His chapters are too brief to deal with these larger philosophical concerns.
That said, readers will learn a great deal in a very few pages in this highly accessible personal finance book for beginners.
Also available in hardcover and ebook.