Review: Stocks, Bonds & Taxes by Phillip B. Chute, EA

With information and recommendations garnered over more than thirty years of practice, author/business advisor Phillip B. Chute has compiled an exhaustive manual for financial investment and planning in Stocks, Bonds & Taxes: A Comprehensive Handbook and Investment Guide for Everybody.

Each chapter of this informative guide contains information about a particular aspect of investing: Equities, Bonds, Mutual Funds, and Other Investments. Each gives a general explanation of the terminology, followed by sections exploring individual investment items, offering Planning Tips, advice on Tax implications, and a look at Compliance matters. For seasoned investors, some of this will be old hat, but the breadth of information we be useful for both novice and veteran investors – though leaning toward the former.

Chute includes both Success Stories and what he has termed Horror Stories, giving real examples of how any given investment might lead to towering achievement and wealth, or end in failure, disgrace, and even incarceration. It is these success and failure stories that enliven the narrative while giving the potential investor realistic food for thought. Many of these stories are well-known, while some are small-scale, personal and known only to the author, whose wry sense of humor adds another layer to the reader’s ability to engage. It is this focus that will be of great interest to experienced investors, as the stories are so unique and well-told.

For instance, in examining stocks and related purchase options, Chute notes that Elvis Presley was fortunate to have the assistance of Colonel Parker, a “gifted, dedicated individual” whose honesty and business savvy kept the star from losing his wealth. By contrast, Martha Stewart’s “horror story” of insider trading landed her in prison. Thomas Watson was an early computer designer who was given a small transistor radio of Japanese design at a time when American portable radios were “big, heavy things.” Watson envisioned a transition in computer technology from large to streamlined, and on his own, created the hugely successful International Business Machines (IBM) Corporation.

In each segment, Chute’s advice is fact-based, statistically and historically supported, and down to earth. He suggests, for example, that planning a prenuptial or post-nuptial financial event is tantamount to planning for divorce, and the resulting haggling may well wind up with the couple in court where only their lawyers will benefit. His segment on precious metals and gems is enlightening; he cites the success of a client who lived modestly, quietly invested in stocks in African gold mines, and retired with a multi-million dollar portfolio. His segment on utilities offers a horror story about the much publicized, shady dealings of Enron in California, suggesting that electrical power will still be a good investment for some years to come – “an assured good thing.”

Chute’s book necessarily contains a vast array of information that could at first seem daunting to an outsider or someone with limited knowledge of this important subject matter, but the author’s scrupulous sense of organization and his informed yet personable writing style provide a comfort zone that makes the material comprehensible, and the advice practical. His “Pros and Cons” at the end of each chapter give pragmatic tips, and he has compiled a lengthy Glossary as a quick reference for those new to the complexities of the subject matter, which is helpful for the novice, while not bogging down experienced readers with information they already know.

Impressively researched and organized, Stocks, Bonds & Taxes will be useful for readers and investors of any level of expertise.