The 5 Mistakes Every Investor Makes and How to Avoid Them by Mallouk, Peter -- Read -- Imperial Library of Trantor

Index

Cover Title Page Copyright 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 All 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

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 End User License Agreement