Actionable insights straight to your inbox

Equities logo

Investing in Timeless Principles: Interviews with the Authors of The Forbes/CFA Institute Investment Course

For most people, the thought of  investing in today's stock market may be akin to playing roulette at a casino. Headlines of high-risk behavior on Wall Street and major short-term swings would

For most people, the thought of  investing in today’s stock market may be akin to playing roulette at a casino. Headlines of high-risk behavior on Wall Street and major short-term swings would make any investor nervous to put their money to work. What most people lose sight of, however, is that fundamental concepts of investing still hold up to the test of time. While investors now enjoy unprecedented access to trading platforms and financial information on the market, a lack of understanding of how to use these tools could have the effect of a double-edged sword.

In an effort to help retail and self-directed investors navigate through today’s ever-changing market, Forbes and the CFA Institute have joined forces to improve one of the most useful and educational resources for investors available. The Forbes/CFA Institute Investment Course: Timeless Principles for Building Wealth (Wiley, 2011) leverages the investing insights, market experience and financial discipline of two of the most respected names in the industry. The book is authored by Vahan Janjigian, CFA, Stephen M. Horan, CFA, CIPM, and Charles Trzcinka, and takes a back-to-the-basics approach that covers everything from reading balance sheets to utilizing effective valuation metrics for stock investing, as well as other asset types such as bonds, mutual funds, treasuries and more. The course also goes beyond just the book as readers can access additional educational resources online to help supplement the book’s lessons.

As part of’s mission to better inform and equip self-directed investors to handle the market, each week we will interview one of the co-authors of The Forbes/CFA Institute Investment Course to learn more about their background, and why the investing principles covered in the book are as relevant now as ever before when it comes to building wealth.

We start off this ongoing series with Vahan Janjigian, Chief Investment Officer at Greenwich Wealth Management, LLC and a Forbes columnist and editor of the Forbes Special Situation Survey. He is also the author of Even Buffett Isn’t Perfect: What You Can–and Can’t–Learn from the World’s Greatest Investor.

EQ: The Forbes/CFA Institute Investment Course is a comprehensive guide for everyday investors to better understand the market. Can you discuss the early stages of getting the book developed and reasons behind creating the course?

Janjigian: The history of the book is actually quite interesting. It was started many years ago with the first version coming out in the 1940s. It was started by Malcolm Forbes, who of course ran Forbes magazine for many years. He felt that there really wasn’t enough information out there for the average retail investor and he wanted to provide to them the kind of information that they needed in order to buy stocks. He was primarily focused on stocks and the product was titled at the time The Forbes Stock Market Course.

I got involved with it in the late 1990s after I joined Forbes. I realized that it needed to be updated. There had been a number of updates throughout the years, but I decided that it needed a more thorough update. Stephen Horan and Charles Trzcinka, two of the co-authors of the current course, had done a previous update so I contacted them and told them I wanted to do another one. At the time, Steve Horan was a finance professor at St. Boneventure. Now, of course, he is head of university relations and private wealth management at CFA Institute.  A few years ago, Wiley approached us with the idea of publishing the Course as a book. Steve and I came up with the idea of co-branding it. That’s why it is now called The Forbes/CFA Institute Investment Course.

EQ: The CFA Institute and Forbes are two of the most well-recognized and respected names in the industry. Can you discuss what each organization brings and how the authors worked together to develop to the course?

Janjigian: The book is basically a reflection of the knowledge and experiences of each of the co-authors. Steve, Chuck, and I  worked on our sections independently and brought it all together. Steve wanted to make sure that the book was done in a very responsible manner because the CFA Institute is very concerned about ethics and integrity. They want to make sure retail investors are  getting access to good information and not being misled. Of course Forbes has long been an advocate for the individual investor as well. Chuck, who still works in academia, was focused on the educational content. In the book,  we try to stress the risks of investing as well as the opportunities. We wanted to make sure the book was primarily an educational tool and was not giving the impression that investing in stocks is a sure path to  riches.

Interestingly, the co-authors, even though we had worked together for many years, never actually met in person until the book was in publication. After Wiley printed and published the book, we held a book party and that was the first time we met each other in person.

EQ: There are 13 chapters in the book, each discussing critical areas of investing and managing finances that readers should understand. Can you discuss why these principles are vital for people to understand? Can they benefit seasoned as well as novice investors?

Janjigian: While the book is probably more appropriate for novice investors, we also find that seasoned investors do benefit from this book because it’s a great refresher course. Some investors might have a lot of experience in the market, but they don’t necessarily understand the theories behind all of the things they do. So we try to explain everything in plain English and stress why common stocks are worth what they’re worth and why bonds are worth what they’re worth. We try not to get too theoretical, and there aren’t a lot of equations or things like that in the book. The focus is primarily on common stocks, but we also talk about other investment instruments such as  bonds, mutual funds, and derivatives. The course focuses on the principles, primarily on fundamental analysis as opposed to technical analysis and quantitative analysis. The reason is because that’s the kind of analysis that long-term investors are really more concerned with whereas shorter-term traders really focus more on technicals. The book is really geared more toward long-term investing rather than trading, and we focus on principles that are primarily on long-term, buy-and-hold strategies.

EQ: With the way the market works now, investors have more access and control of their investment portfolios than ever before, regardless of whether they do it themselves or use a financial advisor. Why is it important for investors to understand fundamentals and how to invest, given that the days of completely hands-off portfolio managing no longer apply to this market?

Janjigian: That’s an interesting point, and one we make in the book. It’s extremely important to be an educated investor, and there’s certainly nothing wrong with trusting a broker or financial advisor. I am a financial advisor, and there’s nothing wrong with finding a good one and placing your trust in one. However, you need to be an educated investor in order to monitor your advisors and to understand what they are doing and what they’re saying to you when they explain what they’re doing.

Interestingly, I think one of the benefits and problems that we face today is that trading costs have fallen substantially. The rise of online brokers and advances in technology have made it incredibly cheap to buy and sell stocks, and for the most part, that’s a good thing. However, it also has a negative side. When  it’s so cheap to trade, you see a lot more investors trading instead of investing. A lot of the academic research shows that the more trading you do, the more harm you do to your portfolio.

Jack Bogle, the founder of The Vanguard Group, has pointed this out many times. For example, when he talks about ETFs, he thinks they’re excellent investment vehicles but he doesn’t like the idea that you can buy and sell them at any time during the day. It encourages more trading and it encourages people to harm their portfolios by doing that. These are some of the things we point out in the book. Yes, transaction costs are a lot lower than they used to be, but transaction costs should not be an important factor for long-term investors. Trading costs are more important to high-frequency traders, and that’s not the approach we’re trying to stress in the book.

EQ: The idea of Wall Street and investing money in general usually intimidates most people. How does this book serve to help them overcome some of those fears and to simplify the market?

Janjigian: That’s true and especially so in the last few years because of all the volatility that we’ve seen in the market. I talk to retail investors all the time and some say they don’t want to be in the market anymore, and at most, they’ll buy a few mutual funds. For the most part, they want to stay out of stocks because they consider them to be too risky. Yes, stocks in general are a lot more volatile than bonds and other types of asset classes. But as we point out in the book, while there might be a lot of volatility, over the long term you will do better with stocks. So even though it’s true that there have been a few 10-year periods of time where stocks haven’t done very well, these periods are very rare for the most part. If you’re willing to invest for 10 years, you’re most likely going to do much better in stocks than with some of the other so called “safer investments.” We try to stress in the book that you need to take this long-term approach and focus on that.

EQ: The book itself is really just the beginning of the course. There is also a wealth of resources that readers can access. Can you tell us more about them?

Janjigian: Our book has a companion website ( that people can go to and access a lot of online resources to go along with the course. For example, we have a quiz online for readers to go through as you’re going through the book. There are plenty of other resources online as well. There are additional articles and multimedia content like podcasts and webcasts too.

Going beyond that, however, I would also recommend people do as much reading as possible.

Anybody who has a brokerage account for example, even if it’s a discount brokerage firm, can typically get access to online research that’s available. There also are excellent periodic publications such as Forbes, The Economist, Bloomberg Businessweek, and others. There are also a number of classic books that I would recommend people take a look at to really understand the market as well. One of my favorites is a book by Burton Makiel called A Random Walk Down Wall Street. It’s an excellent book that does a very good job of explaining the markets. Jack Bogle has a book called Common Sense on Mutual Funds, and Charles Ellis has a book called Winning the Loser’s Game that I would strongly recommend. Of course, one of the classics is Benjamin Graham’s book The Intelligent Investor. Anybody who’s interested in investing and taking investing seriously,  should read these books. Even though we’re in the internet age, sometimes reading a good classic book is the best way to go.

EQ: This interview really serves to kick off a series of weekly interviews with the co-authors of the course. What are some thoughts you’d like to share with our readers before we dive into the chapters and topics covered in the book?

Janjigian: I guess what I would stress again is that the book is kind of an introduction to investing. It’s really very appropriate for any type of novice investor. We find that many people are buying the book as gifts for recent college graduates who are interested in investing. We’re also getting comments from relatively experienced investors who thought it was a great refresher course and there’s a lot of information in there that they didn’t think about. As I said, even though the emphasis is primarily on stocks, we do have quite a bit of information in the book devoted to mutual funds, fixed income securities and derivatives.

AT&T, T-Mobile and Verizon should be turning the volume up. Their current quiet murmur is just not enough.