YOU'RE KIDDING, RIGHT?

Wall Street investment veteran Goldfarb reflects on his career managing other people’s money—and expectations.

At one point in his 35-year run as a financial advisor and portfolio manager, the author encountered a kindly older couple who informed him of their desire to risk very little and not lose a cent. At the same time, the retirees wanted to make sure their investments provided them with a 12 to 15 percent annual return after fees. Never mind the fact that the average rate of return is about five percent—this couple wanted their 12 to 15 percent return, and they didn’t want to chance losing their shirts to attain it. Goldfarb’s incredulous reaction to these would-be clients helped set the focus for his entire book. (As he later explains, these types of cockamamie notions almost moved him to title the book, “Are You %$#@*#% Kidding Me?”)Investors hoping to learn the ins and out of the market will not be disappointed—Goldfarb devotes much of his engaging prose to addressing the kind of fundamentals that do not show up on the S&P 500 Index. “Having reasonable and realistic expectations are key for success,” he writes. “If you think your physical endurance at age eighty is the same as when you were twenty, you are setting yourself up for failure.” It’s a special kind of unvarnished, no-nonsense advice, presented in a bright and friendly manner that makes some very hard economic facts a lot more tolerable. Think you’ll retire like a king with a million-dollar investment portfolio? Think again, the author warns in his supremely affable way—actually, your spending will be capped at just 40 grand per year.  Managing investor expectations and being honest about everything from personal tolerances to possibly losing it all are paramount in Goldfarb’s worldview. He’s a long-term investor who repeatedly urges readers to “create a plan, and stick to it.” Yes, he allows, smart investors might have to tweak things here and there, but ultimately, “Market timing doesn’t work.” Instead, the author charts emotions in relation to the market’s inevitable roller-coaster routine. Get a handle on those emotions, be honest about them, and you just might make out all right—here, Goldfarb shows the way.

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