{"product_id":"the-5-mistakes-every-investor-makes-and-how-to-avoid-them-9781119794332","title":"The 5 Mistakes Every Investor Makes and How to","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003e\u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xv\u003c\/p\u003e \u003cp\u003eAbout the Author xvii\u003c\/p\u003e \u003cp\u003eLegal Disclosure xix\u003c\/p\u003e \u003cp\u003eIntroduction The Market Wants to Be Your Friend xxi\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMistake #1 Market Timing 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Idiots 5\u003c\/p\u003e \u003cp\u003eWhy Is It So Hard to Beat the Market? 6\u003c\/p\u003e \u003cp\u003eEfficient Markets 7\u003c\/p\u003e \u003cp\u003eThe Evidence (Research and Stuff) 8\u003c\/p\u003e \u003cp\u003eThe Media Get It Wrong, Over and Over Again 8\u003c\/p\u003e \u003cp\u003eEconomists Get It Wrong, Over and Over Again 9\u003c\/p\u003e \u003cp\u003eInvestment Managers Get It Wrong, Over and Over Again 14\u003c\/p\u003e \u003cp\u003eNewsletters Get It Wrong, Over and Over Again 17\u003c\/p\u003e \u003cp\u003eYour Buddy 18\u003c\/p\u003e \u003cp\u003eStrategies That Don’t Sound Like Market Timing but Are Market Timing—Oh, and They Don’t Work Either 19\u003c\/p\u003e \u003cp\u003eAsset-Class Rotation 19\u003c\/p\u003e \u003cp\u003eTactical Asset Allocation 20\u003c\/p\u003e \u003cp\u003eStyle Rotation 20\u003c\/p\u003e \u003cp\u003eSector Rotation 20\u003c\/p\u003e \u003cp\u003eWhat Smart Investors Have to Say on Market Timing 20\u003c\/p\u003e \u003cp\u003eKnowing All This, Why Would Anyone Market Time? 21\u003c\/p\u003e \u003cp\u003eCorrections 22\u003c\/p\u003e \u003cp\u003eBear Markets: An Overview 26\u003c\/p\u003e \u003cp\u003eBear Markets Happen for Different Reasons, but the Outcome Is Always the Same 27\u003c\/p\u003e \u003cp\u003eBear Markets Are Not Predictable 28\u003c\/p\u003e \u003cp\u003eWhen Bear Markets “Turn,” They Make People on the Sidelines Look Silly 30\u003c\/p\u003e \u003cp\u003eThe Market Is Volatile—Get Used to It 30\u003c\/p\u003e \u003cp\u003eYou Can’t Wait for Consumers to Feel Good 31\u003c\/p\u003e \u003cp\u003eLearning to Accept the Bear Markets 33\u003c\/p\u003e \u003cp\u003eMiscalculating the Risk of Market Timing 34\u003c\/p\u003e \u003cp\u003eBut What If I Am Perfect? 34\u003c\/p\u003e \u003cp\u003eLump-Sum Investing versus Dollar-Cost Averaging 36\u003c\/p\u003e \u003cp\u003eLearning to Fly 40\u003c\/p\u003e \u003cp\u003eAvoiding Mistake #1—Market Timing 41\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMistake #2 Active Trading 43\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe History of Active Trading 44\u003c\/p\u003e \u003cp\u003eActive Investment Managers Lose to Indexing 45\u003c\/p\u003e \u003cp\u003eNewsletters Lose to Indexing 45\u003c\/p\u003e \u003cp\u003eActive Mutual Funds Lose to Indexing 45\u003c\/p\u003e \u003cp\u003eSurvivor Bias (a.k.a. Mutual Fund Performance Is Even Worse Than the Data Suggests) 47\u003c\/p\u003e \u003cp\u003eWhat About the Winners, Huh? What About the Winners?! 48\u003c\/p\u003e \u003cp\u003eHedge Funds Lose to Indexing 51\u003c\/p\u003e \u003cp\u003eEndowments—Misperception of Performance 56\u003c\/p\u003e \u003cp\u003eVenture Capital (Sounds Sexy but Usually a Dog) 57\u003c\/p\u003e \u003cp\u003eThe Taxman Cometh (a.k.a. Dear Goodness, It Gets Worse) 59\u003c\/p\u003e \u003cp\u003ePortfolio Activity Hurts Performance 59\u003c\/p\u003e \u003cp\u003eBut Doesn’t Active Management\u003c\/p\u003e \u003cp\u003eWork in a Down Market? 60\u003c\/p\u003e \u003cp\u003eWhy Indexes Win 61\u003c\/p\u003e \u003cp\u003eBut Indexing Results in Average Returns 62\u003c\/p\u003e \u003cp\u003eS\u0026amp;P 500, Here I Come! 62\u003c\/p\u003e \u003cp\u003eAvoiding Mistake #2—Active Trading 64\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMistake #3 Misunderstanding Performance and Financial Information 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMisunderstanding #1—Judging Performance in a Vacuum 65\u003c\/p\u003e \u003cp\u003eMisunderstanding #2—Believing the Financial Media Exists to Help You Make Smart Decisions (a.k.a. the Media Is Killing You) 67\u003c\/p\u003e \u003cp\u003eMisunderstanding #3—Believing That the Market Cares About Today 71\u003c\/p\u003e \u003cp\u003eMisunderstanding #4—Believing an All-Time High Means the Market is Due for a Pullback 74\u003c\/p\u003e \u003cp\u003eMisunderstanding #5—Believing Correlation Equals Causation 77\u003c\/p\u003e \u003cp\u003eOctober Is The Worst Month to Invest 77\u003c\/p\u003e \u003cp\u003eSell in May and Go Away 78\u003c\/p\u003e \u003cp\u003eMisunderstanding #6—Believing Financial News Is Actionable 79\u003c\/p\u003e \u003cp\u003eMisunderstanding #7—Believing Republicans Are Better for the Market Than Democrats 80\u003c\/p\u003e \u003cp\u003eMisunderstanding #8—Overestimating the Impact of a Manager 82\u003c\/p\u003e \u003cp\u003eMisunderstanding #9—Believing Market Drops Are the Time to Get Defensive 83\u003c\/p\u003e \u003cp\u003eAvoiding Mistake #3—Misunderstanding Performance and Financial Information 84\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMistake #4 Letting Yourself Get in the Way 85\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFear, Greed, and Herding 85\u003c\/p\u003e \u003cp\u003eThe Overconfidence Effect 89\u003c\/p\u003e \u003cp\u003eConfirmation Bias 93\u003c\/p\u003e \u003cp\u003eAnchoring 95\u003c\/p\u003e \u003cp\u003eLoss Aversion 97\u003c\/p\u003e \u003cp\u003eMental Accounting 98\u003c\/p\u003e \u003cp\u003eRecency Bias 100\u003c\/p\u003e \u003cp\u003eNegativity Bias 103\u003c\/p\u003e \u003cp\u003eThe Gambler 105\u003c\/p\u003e \u003cp\u003eAvoiding Mistake #4—Letting Yourself Get in the Way 106\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMistake #5 Working with the Wrong Advisor 107\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMost Advisors Will Do Far More Harm Than Good 108\u003c\/p\u003e \u003cp\u003eAdvisor Selection Issue #1—Custody 108\u003c\/p\u003e \u003cp\u003eAdvisor Selection Issue #2—Conflict 113\u003c\/p\u003e \u003cp\u003eTest #1—Independent Advisor or Broker? 114\u003c\/p\u003e \u003cp\u003eInvestment Advisor Defined 114\u003c\/p\u003e \u003cp\u003eBroker Defined 114\u003c\/p\u003e \u003cp\u003eSo What’s the Difference? 115\u003c\/p\u003e \u003cp\u003eTest #2—Pure Independent versus Independent and Broker 116\u003c\/p\u003e \u003cp\u003eTest #3—Proprietary Funds versus No\u003c\/p\u003e \u003cp\u003eProprietary Funds 117\u003c\/p\u003e \u003cp\u003eA Final Thought on Conflicts 118\u003c\/p\u003e \u003cp\u003eAdvisor Selection Issue #3—Competence 119\u003c\/p\u003e \u003cp\u003eCompetence Check #1—Do the Advisor’s Credentials Meet Your Needs? 120\u003c\/p\u003e \u003cp\u003eCompetence Check #2—Is the Advisor Right for You? 120\u003c\/p\u003e \u003cp\u003eCompetence Check #3—Is the Advisor Following a Process That You Agree With? 120\u003c\/p\u003e \u003cp\u003eA Final Thought on Advisors—Principles 121\u003c\/p\u003e \u003cp\u003eAvoiding Mistake #5—Choosing the Wrong Advisor 122\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMistake #6 No Mistaking 125\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRule #1: Have a Clearly Defined Plan 125\u003c\/p\u003e \u003cp\u003eRule #2: Avoid Asset Classes That Diminish Results 127\u003c\/p\u003e \u003cp\u003eCash—The Illusion of Safety 127\u003c\/p\u003e \u003cp\u003eThe Illusion of Gold as a Way to Grow Wealth 129\u003c\/p\u003e \u003cp\u003eRule #3: Use Stocks and Bonds as the Core Building Blocks of Your Intelligently Constructed Portfolio 131\u003c\/p\u003e \u003cp\u003eRule #4: Take a Global Approach 138\u003c\/p\u003e \u003cp\u003eRule #5: Use Primarily Index-Based Positions 140\u003c\/p\u003e \u003cp\u003eRule #6: Don’t Blow Out Your Existing Holdings 140\u003c\/p\u003e \u003cp\u003eRule #7: Be Sure You Can Live with Your Allocation 142\u003c\/p\u003e \u003cp\u003eRule #8: Rebalance 143\u003c\/p\u003e \u003cp\u003eRule #9: Revisit the Plan 144\u003c\/p\u003e \u003cp\u003eThe Ultimate Rule: Don’t Mess It Up! 145\u003c\/p\u003e \u003cp\u003ePortfolio Example 146\u003c\/p\u003e \u003cp\u003eThe “I Want to Beat the Market” Portfolio 146\u003c\/p\u003e \u003cp\u003eThe “I Need 7 Percent to Hit My Long-Term Retirement Goal” Portfolio 146\u003c\/p\u003e \u003cp\u003eThe “Get Me What I Need for the Rest of My Life with the Least Volatility Possible” Portfolio 147\u003c\/p\u003e \u003cp\u003eThe “I Have More Money Than I Will Ever Need and I Want It to Grow with Minimal Volatility” Portfolio 148\u003c\/p\u003e \u003cp\u003eThe “I Have More Money Than I Will Ever Need, Volatility Doesn’t Bother Me, and I Want It to Grow Along with the Market” Portfolio 148\u003c\/p\u003e \u003cp\u003eA Path to Success: Intelligent Portfolio Construction 150\u003c\/p\u003e \u003cp\u003eYou’re the One 151\u003c\/p\u003e \u003cp\u003eConclusion Let’s Roll!! 153\u003c\/p\u003e \u003cp\u003eReferences 155\u003c\/p\u003e \u003cp\u003eIndex 163 \u003c\/p\u003e","brand":"John Wiley \u0026 Sons Inc","offers":[{"title":"Default Title","offer_id":49407155306839,"sku":"9781119794332","price":17.85,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9781119794332.jpg?v=1730498363","url":"https:\/\/bookcurl.com\/products\/the-5-mistakes-every-investor-makes-and-how-to-avoid-them-9781119794332","provider":"Book Curl","version":"1.0","type":"link"}