"Is this the time to look for cover from the stock market?"

There is no doubt that the present investment climate is far from looking great. With the Enron scandal and the accounting irregularities, it is no wonder that the average investor is running for cover. Is this the time to dump the stock market and place our money under our mattresses? Probably not and it is refreshing to read Steven R. Selengut's investment primer entitled "The Brainwashing Of The American Investor," where he provides us with a book that will show us how to manage our money in a more realistic and safe manner.

The initial chapters of the book expose how political, social and economic elements of Wall Street influence our investment decisions. By understanding this environment, we will be better equipped in making rewarding investments in an objective and focused manner. We are apprised of the brain washing of Wall Street financial firms and how they expend billions of dollars annually to entice the lowly investor to move his money from one product to another that in the end only enhance the coffers of the institution. The remainder of the book concerns itself with how to develop and manage a working equity portfolio.

Selengut is a seasoned money manager with over twenty-five years of experience and a shrewd understanding of investment realities. Much of his strategy is based on the following principles: the quality of the asset, diversification of your holdings, income derived from the asset, profit taking, discipline and careful planning. Apart from these elements, the author affirms that he is a trader as differentiated from someone who buys and holds. He is not a day trader, nor a speculator, but rather someone who believes that you should have a time frame of twelve months and a target profit of ten percent. As he states, "there is no such thing as a bad profit." The key is not to be too greedy. Once you sell there will always be other opportunities to reinvest and start all over again. Unfortunately, as the author points out, very often people are dissuaded from selling due to their falling in love with the stock, tax implications, brokerage fees and believing that the stock has not reached its full profit potential.

This investment primer is undoubtedly very useful, however, it would have been more effective if it contained an index as well as a summation of the main principles within each section. I also found the structure of the chapters somewhat cumbersome. Perhaps a good editor would have detected these shortcomings. Nevertheless, the book's abundance of good advice and information should prove to be extremely helpful in learning how to react to present day financial insecurities.

Reviewed by Norman Goldman
Posted July 17, 2002