by Clemens Bomsdorf is a really very simply written financial book. Perfect for beginners and for all those people who are interested in the Norwegian Sovereign Wealth Fund. Norway is known not only one of the happiest countries on earth, but is also one of the few countries where citizens are rather less concerned about the finances of their state. This is because in addition to a beautiful landscape, fjords and mail ships, Norway is also rich in oil and gas and uses this wealth of raw materials to provide capital to the largest sovereign wealth fund in the world.
This fund is not only much discussed, but also serves some private investors as an orientation for a long-term successful investment approach. In his book, the author has taken apart the strategy of the Norwegian sovereign wealth fund in detail and adapted it to the needs and possibilities of private investors.
For Clemens Bomsdorf, the Norwegian sovereign wealth fund is the ideal role model for private investors for seven reasons:
- He is successful.
- It is transparent.
- It invests in reputable investment products.
- He has the costs under control.
- It invests money in such a way that the strategy can be imitated without spending much time.
- It follows ethical guidelines.
- It invests almost exclusively in stocks and bonds that anyone can buy.
The average annual return of this fund is around 6 percent, which is above a DAX40 but below the MSCI World.
The book is structured in such a way that the first chapters provide a basic introduction to the topic, provide motivation and examine the structure of the Norwegian SWF. From the fourth chapter, the author then also explicitly addresses the guidelines of the Norwegian SWF's investment strategy from the perspective of private investors. From this, he derives eight steps to be able to apply and implement the Norwegian financial formula, as he calls it, in a private portfolio as well.
This implementation then starts in the fifth chapter. The sixth chapter then focuses more on the ethical guidelines of the fund and discusses this topic in general. This is an area that has become increasingly relevant for many, especially in recent years. The Norwegian sovereign wealth fund has always applied ethical criteria when selecting its investments. However, these do not, of course, have to correspond one-to-one to the standards of all readers.
Finally, of course, a bit of behavioral finance should not be missing. Because, as Daniel Kahneman and co. have pointed out in countless works and studies, we usually get in our own way when it comes to successful investment on the capital market.
This book is thus designed to guide readers step by step to apply the Norwegian financial formula to their own portfolio. Each step is described in very simple terms, a lot of background knowledge is conveyed and thus an important foundation is laid in terms of financial education. For me, this is also a reason why I see two target groups united in the book. On the one hand, absolute beginners, who are actually taken by the hand here in a pleasant way. On the other hand, there are also experienced investors who simply want to find out about the peculiarities of the Norwegian sovereign wealth fund.
"Many financial guidebooks boast unrealistic promises such as "become a millionaire in no time," This book explicitly does not. Instead, with the Norwegian financial formula, it offers you assistance in realistically achieving considerably better results in investing money than before."
Clemens Bomsdorf
As a freelance journalist and Northern Europe correspondent, Clemens Bomsdorf lived in Scandinavia for a long time. From 2012 to 2014, he was employed by the Wall Street Journal and, as a member of the correspondents' association Weltreporter, wrote primarily about the Nordic countries, finance, and culture. A year after the first publication of this book, he began working for the Royal Norwegian Embassy in Berlin.
"Instead of sitting doggedly at home at the computer and trying to beat the index, but being frustratedly worse than average for it, why not use the Norwegian financial formula in a relaxed way and otherwise enjoy life, and even do so with a relatively good conscience thanks to ethical investment products. That would also make you a bit more Norwegian. After all, leisure time, the end of the day and nature have a particularly high priority high up in the north of Europe. How we could draw inspiration from Northern Europe in that respect would be another topic, though. And another book."
Clemens Bomsdorf
Personally, this book really gave me some interesting knowledge at the end that I was not aware of so far. Really well written and undoubtedly recommendable. You certainly won't do anything wrong with this and will be able to take a lot with you, not only as a beginner.