The Emotional Investor
This blog post is dedicated to sharing some of my favorite excerpts from my first book, The Emotional Investor. The book has been out a month now and became an Amazon Best Seller. Thank you to all who purchased the book! Not only am I surprised at the quantity sold, I am thrilled with the strong feedback I have received, both from financial professionals and retail investors.
Purpose of the Book
The book was written for the retail investor, with a hope that advisors would find value in the book and either purchase books for their clients, or recommend their clients purchase. The book is short (only 140 pages) and to the point. It reviews common investor biases, but focuses primarily on what investors can do to overcome the influence of these innate biases. Light on theory, heavy on application. This book is a manual on how to think better about investments, the markets and the noise.
Favorite Excerpts by Chapter
CH 2 – “There is some good in volatility…Volatility reminds us that there are risks, and helps us focus more on the long-term potential.”
CH 3 – “Strategic procrastination should be a part of every investment plan.”
CH 4 – “Our search for cause and effect exacerbates the illusion of certainty by tricking us into believing that the future is more predictable than it really is.”
CH 5 – “If the market goes up on average, then we need to give it enough time for the average to occur.”
CH 6 – “If you are influenced to make a change, ask yourself, ‘Where did this idea originate?’ If it originated from the financial media, viewer beware.
CH 7 – “The tragedy isn’t the mistake. The tragedy is failing to learn from the mistake.”
CH 8 – “Investing instincts are often wrong. Buy low and sell high often requires you to do the opposite of your instincts.”
CH 9 – “If the aversion to undesirable outcomes is greater than the loss aversion, we may be able to make the less emotional and more thoughtful choice.”
CH 10 – “Seek out investment truths – not stereotypes, rumors or cliches – to develop the correct perception. (This book contains some important investment truths)”
CH 11 – “A customized investment plan based on your preferences will help you make the optimal choices for you.”
CH 12 – “We need to engage a personal financial trainer.”
CH 13 – “It doesn’t matter how much you know, it matters what you do with what you know.”