Do you have too much American influence?

In one of the older posts here on Enrichmentality, we talked about financial resources being a bit like milk – in some cases, the older they get, the more off they are. So the time of production of any advice is important. Especially in the case of highly-specialised, subject to frequent change information. Like interest rates or tax rates or first home owner’s grants. But how much should we worry about where our advice comes from? Is there such a thing as too much American influence?

Many Australians and Kiwis I know have complained about the deluge of American financial resources. And the comparative dearth of Aus/NZ ones. Recently, this was highlighted by one reader who pointed to the huge amount of US-specific stock market investing advice out there in the form of blogs, videos and so on, but the difficulty in finding comparable Australian resources.

In my previous post on this topic, I wrote:

“Philosophy about how to live your life, and very general principles of money apply pretty much anywhere in the world, but the specifics of investment advice tend not to stand up to the test of time, or cross borders very well.”

That being said, many of my favourite books or blogs on finance are from America, for an American audience.

Given the US population of 327 million compared to Australia’s not quite 25 million, it’s unsurprising we don’t really compete when it comes to English-language investing advice. It’s especially unsurprising when we consider the fact that the stocks  listed on the US exchanges make up the majority of the world’s stock market capitalisation (that is, total dollar value). The Australian stock market – or that of most countries – is just a drop in the bucket in comparison.

So what should I read if I’m interested in a market outside the US?

Essentially, my advice would be, when it comes to general questions of investing, it doesn’t matter too much where the book comes from, or when it was written. I’m talking about things like the advantages of buying and holding vs. day trading. Or the sort of fundamentals you might look for in a company. Although these may still differ from location to location, and time to time, you should still be able to glean some useful information. The investing advice of Warren Buffet and Charlie Munger, or Benjamin Graham, I would put in this bucket.

When it comes to specific issues, getting information which is both up-to-date and written by an expert locally is vital. I mean stuff like tax implications. Or how to buy and sell shares online. Or the local economic outlook. A book written in another country, or one written just a couple of years ago, will likely be irrelevant.

There aren’t many Australian investing superstars (e.g. anyone comparable to Warren Buffet). So when it comes to philosophy type questions, I’m more likely to look to overseas experts. But for everything else, I look for someone domestic.

Personally, I tend to prefer reading rather than listening or watching when it comes to research. It’s impossible to absorb and remember everything you read, listen to, or watch. Reading allows me to use sticky notes or highlighters (or bookmarks and annotations on my eReader). That way I can refer back to important points much more easily than I could on a video or a podcast. I have watched some of Roger Montgomery’s videos when it comes to the Australian sharemarket, but I found his book Value.Able much more… valuable.

So what books or blogs would I suggest?

Here’s a list of my ‘favourites’ – including books.

Some examples:

Roth publishes a book called ‘Top Stocks’ every year. As the title suggests, it lists the top stocks on the ASX by a variety of measures, with some information about them. It’s never going to be up-to-date because of the time frame of the publishing industry, however, I found it very instructive to read a few past years’ editions and see how companies tracked over time. Of course, as you’ll always hear, past performance is not necessarily an indicator of how something will perform in the future. But, it is a good exercise, I think, to take a look at an edition that is a bit old.

  • Grab an issue, say, five years back. And some in between if you can. (You can often pick up copies from the library.)
  • Give it a read, and pick some stocks. (You can use post-it notes to pick them out – no actual money on the table required!)
  • Then read a more up-to-date edition and see how they are tracking.

I read Top Stocks to get general ideas of where to invest, and then I also checked out a few issues’ back for any companies I was really interested in.

Another book, also published by John Wiley & Sons Australia (which I have found to be a pretty reliable source of financial info in Australia) is Tracey Edwards’ Shopping for Shares. She has written a couple of books aimed at women which I highly recommend. To everyone.

You may well ask, do we really need finance books especially for women? Is there something inherently different about how men and women invest? Stay tuned for the next post!

Where are you from? What investments are you interested in? Let me know in the comments!

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