27,99 €
A simple guide to a smarter strategy for the individual investor
A Wealth of Common Sense sheds a refreshing light on investing, and shows you how a simplicity-based framework can lead to better investment decisions. The financial market is a complex system, but that doesn't mean it requires a complex strategy; in fact, this false premise is the driving force behind many investors' market "mistakes." Information is important, but understanding and perspective are the keys to better decision-making. This book describes the proper way to view the markets and your portfolio, and show you the simple strategies that make investing more profitable, less confusing, and less time-consuming. Without the burden of short-term performance benchmarks, individual investors have the advantage of focusing on the long view, and the freedom to construct the kind of portfolio that will serve their investment goals best. This book proves how complex strategies essentially waste these advantages, and provides an alternative game plan for those ready to simplify.
Complexity is often used as a mechanism for talking investors into unnecessary purchases, when all most need is a deeper understanding of conventional options. This book explains which issues you actually should pay attention to, and which ones are simply used for an illusion of intelligence and control.
You don't have to outsmart the market if you can simply outperform it. Cut through the confusion and noise and focus on what actually matters. A Wealth of Common Sense clears the air, and gives you the insight you need to become a smarter, more successful investor.
Das E-Book können Sie in Legimi-Apps oder einer beliebigen App lesen, die das folgende Format unterstützen:
Seitenzahl: 353
Veröffentlichungsjahr: 2015
Since 1996, Bloomberg Press has published books for financial professionals, as well as books of general interest in investing, economics, current affairs, and policy affecting investors and business people. Titles are written by well-known practitioners, BLOOMBERG NEWS® reporters and columnists, and other leading authorities and journalists. Bloomberg Press books have been translated into more than 20 languages.
For a list of available titles, please visit our website at www.wiley.com/go/bloombergpress.
Ben Carlson
Cover image: Maze Solution © Wth/Shutterstock.com Cover design: Tom Nery
Copyright © 2015 by Ben Carlson. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993, or fax (317) 572-4002.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.
ISBN 978-1-119-02492-7 (Hardcover) ISBN 978-1-119-02489-7 (ePDF) ISBN 978-1-119-02485-9 (ePub)
For Cortney and Libby, who make me smile every single day.
Introduction: Why Simplicity Is the New Sophistication
Noise
How Hard Can It Be?
Notes
CHAPTER 1 The Individual Investor versus the Institutional Investor
Institutional versus Individual Investors
We're All Human
Extra Zeroes
Long-Term Thinking
Key Takeaways from Chapter 1
Notes
CHAPTER 2 Negative Knowledge and the Traits Required to Be a Successful Investor
The Biggest Problem of All
Traits of a Successful Investor
Standing on the Shoulders of Giants
Key Takeaways from Chapter 2
Notes
CHAPTER 3 Defining Market and Portfolio Risk
Volatility: Risk or Opportunity?
Understanding Rule Number 1 of Investing
The Risk Tolerance Questionnaire
Risk versus Uncertainty
Risk Aversion
The Cycle of Fear and Greed
Key Takeaways from Chapter 3
Notes
CHAPTER 4 Market Myths and Market History
Myth 1: You Have to Time the Market to Earn Respectable Returns
Myth 2: You Have to Wait until Things Get Better Before You Invest
Myth 3: If Only You Can Time the Next Recession, You Can Time the Stock Market
Myth 4: There's a Precise Pattern in Historical Market Cycles
Myth 5: Stocks and Bonds Always Move in Different Directions
Myth 6: You Need to Use Fancy Black Swan Hedges in a Time of Crisis
Myth 7: Stocks Are Riskier Than Bonds
Myth 7a: Bonds Are Riskier Than Stocks
Myth 8: The 2000s Were a Lost Decade for the Stock Market
Myth 9: New All-Time Highs in the Stock Market Mean It's Going to Crash
Myth 10: A Yield on an Investment Makes It Safer
Myth 11: Commodities Are a Good Long-Term Investment
Myth 12: Housing Is a Good Long-Term Investment
Myth 13: Investing in the Stock Market Is Like Gambling at a Casino
Key Takeaways from Chapter 4
Notes
CHAPTER 5 Defining Your Investment Philosophy
Degrees of Active and Passive Management
The Benefits of Doing Nothing
Exercising Your Willpower
Simplicity Leads to Purity
Defining Yourself as an Investor
Key Takeaways from Chapter 5
Notes
CHAPTER 6 Behavior on Wall Street
Threading the Needle
So Never Invest in Active Funds?
The Most Important Thing
Key Takeaways from Chapter 6
Notes
CHAPTER 7 Asset Allocation
Asset Allocation Decisions
Why Diversification Matters
Mean Reversion and Rebalancing
Risk Factors, Value Investing, and the Power of Patience
The Value Premium
The Rise of Smart Beta
How to See It Through
Key Takeaways from Chapter 7
Notes
CHAPTER 8 A Comprehensive Investment Plan
Why Do You Need a Plan?
The Investment Policy Statement (IPS)
Lifecycle Investing
Beating the Market
Saving Money
Taxes and Asset Location
Key Takeaways from Chapter 8
Notes
CHAPTER 9 Financial Professionals
Vetting Your Sources of Financial Advice
Outsourcing to a Financial Professional
What a Financial Advisor Can Do for You
How to Be a Good Client
Benchmarking and Ongoing Maintenance
Alternatives
Key Takeaways from Chapter 9
Notes
Conclusion
Book List
Notes
About the Author
Index
EULA
Chapter 1
Table 1.1
Chapter 3
Table 3.1
Table 3.2
Table 3.3
Chapter 4
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table 4.5
Table 4.6
Table 4.7
Table 4.8
Table 4.9
Table 4.10
Table 4.11
Chapter 6
Table 6.1
Table 6.2
Table 6.3
Table 6.4
Table 6.5
Chapter 7
Table 7.1
Table 7.2
Table 7.3
Table 7.4
Table 7.5
Table 7.6
Chapter 9
Table 9.1
Chapter 2
Figure 2.1
Eight Symptoms of Groupthink
Chapter 3
Figure 3.1
Annual Stock Market Returns, 1928–2013 (Standard & Poor's 500)
Figure 3.2
Annual Bond Returns, 1928–2013 (10-Year Treasury Bonds)
Figure 3.3
Annual Cash Returns, 1928–2013 (Three-Month Treasury Bills)
Figure 3.4
The Wrong Move at the Wrong Time
Chapter 4
Figure 4.1
Three-Year Rolling Correlation between Stocks and Bonds
Figure 4.2
S&P 500 1900 to 2014
Figure 4.3
S&P 500 Dividends 1900 to 2014
Chapter 9
Figure 9.1
Words and Phrases to Watch Out for with Poor Financial Advice
Cover
Table of Contents
Chapter
xi
xii
xiii
xiv
xv
xvi
xvii
1
2
3
4
5
6
7
8
9
10
11
13
14
15
16
17
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
41
42
43
44
45
46
47
50
51
53
54
55
56
57
59
60
61
63
64
65
67
68
69
71
72
74
76
77
78
79
80
81
82
83
84
85
86
87
88
89
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
115
116
117
119
120
121
122
123
124
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
189
191
192
193
194
195
In 1776, Thomas Paine, a political activist, philosopher, and poet published a simple pamphlet that likely altered history as we know it. The title of his publication was plain and simple—Common Sense. This tiny pamphlet, which numbered less than 90 pages, inspired the original 13 colonies to seek their independence from Great Britain and form the United States of America. It's been said that virtually every rebel read, or at least listened to, the words written by Paine. This was Paine's introduction to Common Sense:
In the following pages I offer nothing more than simple facts, plain arguments, and common sense; and have no other preliminaries to settle with the reader, than that he will divest himself of prejudice and prepossession, and suffer his reason and his feelings to determine for themselves; that he will put ON, or rather that he will not put OFF, the true character of a man, and generously enlarge his views beyond the present day.1
Paine's simple words ignited the people of that day to fight for their independence. As John Quincy Adams, the second president of the United States, once said, “Without the pen of the author of , the sword of Washington would have been raised in vain.” Paine's plain, common sense arguments provided the motivation that was so desperately needed to unite people from all walks of life to stand together in their cause. So why did Paine's words resonate with so many people? In a word—simplicity. Many writers of that day and age used dense philosophy and Latin to get their point across. Paine made his case for the benefits of independence by using clear, concise language that everyone could understand. worked well with the crowds in the taverns, but was sophisticated enough to be given credibility by the Colonial dignitaries. His words lived up to the title, as common sense works on a number of levels.
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!