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Phil DeMuth, Ph.D., erstwhile partner of humorist and economist Ben Stein, has a new book, “The Affluent Investor: Financial Advice to Grow and Protect Your Wealth” (Barron’s, 2013)

I like the book, though DeMuth does not much seem to like financial planners, advisors and brokers. Despite this unhappiness (you’d think financial advisors never did good work for customers and yet — wait for it — as a matter of fact, DeMuth is, himself, an advisor), the book has a lot of good nuggets and ideas.   

One idea turns the usual asset allocation strategy on its ear. DeMuth feels that once clients begin receiving Social Security (which he thinks of as an inflation-protected bond), they should slowly move toward taking more risk, so by age 100, they’ll have 100 percent in equities and nothing in bonds.   

He gnaws at Bill Bengen’s work regarding the 4 percent rule, which — am I crazy? — everyone seems to get wrong. I’m pretty sure Bengen was suggesting 4 percent plus inflation.  

The author has a wry sense of humor and calls the efficient market hypothesis the “efficient monster theory,” and he even casts Plato as one reporting jailed financial advisors in 380 B.C., i.e., Plato as the first CNBC.

As readers know, I mostly review books I like and feel would be of value to a practice. Since DeMuth carps about advisors, know that there’s still good meat in this hearty meal.  

Have a fantastic week and keep doing good work for your customers. 

For more from Richard Hoe, see:


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