The 5 mistakes every investor makes and how to avoid them Getting investing right
Book - 2014
Discusses investment techniques that improve performance over time, the importance of disciplined investment management, and the common mistakes made by professionals and every day investors.
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- Subjects
- Published
-
Hoboken, New Jersey :
John Wiley & Sons, Inc
[2014]
©2014 - Language
- English
- Main Author
- Physical Description
- xix, 188 pages : illustrations ; 24 cm
- Bibliography
- Includes bibliographical references (pages 167-174) and index.
- ISBN
- 9781118929001
- Preface
- Acknowledgments
- About the Author
- Introduction The Market Wants to Be Your Friend
- Mistake #1. Market Timing
- The Idiots
- The Liars
- Why Is It So Hard to Beat the Market?
- The Masses Get It Wrong, Over and Over Again
- The Media Get It Wrong, Over and Over Again.
- Economists Get It Wrong, Over and Over Again
- Investment Managers Get It Wrong, Over and Over Again
- Newsletters Get It Wrong, Over and Over Again
- Your Buddy
- Strategies That Don't Sound Like Market Timing but Are Market Timing-Oh, and They Don't Work, Either
- What Smart Investors Have to Say on Market Timing
- Knowing AH This, Why Would Anyone Market Time?
- Corrections
- Bear Markets: An Overview
- When Bear Markets "Turn," They Make People on the Sidelines Look Silly
- The Market Is Volatile-Get Used to it
- You Can't Wait for Consumers to Feel Good
- Learning to Accept the Bear Markets
- Miscalculating the Risk of Market Timing
- But What If I Am Perfect?
- Lump Sum Investing versus Dollar Cost Averaging
- Learning to Fly
- Avoiding Mistake #1-Market Timing
- Mistake #2. Active Trading
- The History of Active Trading
- Active Investment Managers Lose to Indexing
- Fisher Investments
- Legg Mason Value
- Jim Cramer
- Newsletters Lose to Indexing
- Active Mutual Funds Lose to Indexing
- Survivor Bias (a.k.a. Mutual Funds Perform Even Worse Than the Data Suggests)
- What About the Winners, Huh? What About the Winners?!
- Hedge Funds Lose to Indexing
- Endowments-Misperception of Performance
- Venture Capital (Sounds Sexy but Usually a Dog)
- The Taxman Commeth (a.k.a. Dear Goodness,
- It Gets Worse)
- Portfolio Activity Hurts Performance
- But Doesn't Active Management Work in a Down Market?
- Why Indexes Win
- S&P 500, Here I Come!
- Avoiding Mistake #2-Active Trading
- Mistake #3. Misunderstanding Performance and Financial Information
- Misunderstanding #1. Judging Performance in a Vacuum
- Misunderstanding #2. Believing the Financial Media Exists to Help You Make Smart Decisions (a.k.a. the Media Is Killing You)
- Misunderstanding #3. Believing the Market Cares about Today
- Misunderstanding #4. Believing an All-Time High Means the Market Is Due for a Fullback
- Misunderstanding #5. Believing Correlation Equals Causation
- October Is the Worst Month to Invest
- Sell in May and Go Away
- Misunderstanding #6. Believing Financial News Is Actionable
- Misunderstanding #7. Believing Republicans Are Better for the Market Than Democrats
- Misunderstanding #8. Overestimating the Impact of a Manager
- Misunderstanding #9. Believing Market Drops Are the Time to Get Defensive
- Avoiding Mistake #3. Misunderstanding Performance and Financial Information
- Mistake #4. Letting Yourself Get in the Way
- Fear, Greed, and Herding
- The Overconfidence Effect
- Confirmation Bias
- Anchoring
- Loss Aversion
- Mental Accounting
- Recency Bias
- Negativity Bias
- The Gambler
- Avoiding Mistake #4. Letting Yourself Get in the Way
- Mistake #5. Working with the Wrong Advisor
- Most Advisors Will Do Far More Harm Than Good
- Advisor Selection Issue #1. Custody
- Advisor Selection Issue #2. Conflict
- Advisor Selection Issue #3. Competence
- A Final Thought on Advisors-Principles
- Avoiding Mistake #5. Choosing the Wrong Advisor
- Mistake #6. Getting It Right
- Rule #1. Have a Clearly Defined Plan
- Rule #2. Avoid Asset Classes That Diminish Results
- Rule #3. Use Stocks and Bonds as the Core Building Blocks of Your Intelligently Constructed Portfolio
- Putting It All Together
- Rule #4. Take a Global Approach
- Rule #5. Use Primarily Index-Based Positions
- Rule #6. Don't Blow Out Your Existing Holdings
- Rule #7. Asset Location Matters
- Rule #8. Be Sure You Can Live with Your Allocation
- Rule #9. Rebalance
- Rule #10. Revisit the Plan
- The Ultimate Rule-Don't Mess It Up!
- Portfolio Examples
- A Path to Success-Intelligent Portfolio Construction
- The Ultimate Mistake
- Conclusion Let's Roll!
- References
- Index