- Cover
- Title Page
- Copyright
- Dedication
- Preface
- Acknowledgments
- About the Author
- Legal Disclosure
- INTRODUCTION: The Market Wants to Be Your Friend
- MISTAKE #1: Market Timing
- The Idiots
- Why Is It So Hard to Beat the Market?
- Efficient Markets
- The Evidence (Research and Stuff)
- 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
- Asset-Class Rotation
- Tactical Asset Allocation
- Style Rotation
- Sector Rotation
- What Smart Investors Have to Say on Market Timing
- Knowing All This, Why Would Anyone Market Time?
- Corrections
- Bear Markets: An Overview
- Bear Markets Happen for Different Reasons, but the Outcome Is Always the Same
- Bear Markets Are Not Predictable
- 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
- Notes
- MISTAKE #2: Active Trading
- The History of Active Trading
- Active Investment Managers Lose to Indexing
- Newsletters Lose to Indexing
- Active Mutual Funds Lose to Indexing
- Survivor Bias (a.k.a. Mutual Fund Performance Is 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 Cometh (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
- But Indexing Results in Average Returns
- S&P 500, Here I Come!
- Avoiding Mistake #2—Active Trading
- Notes
- 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 That the Market Cares About Today
- Misunderstanding #4—Believing an All-Time High Means the Market is Due for a Pullback
- 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
- Notes
- 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
- Test #1—Independent Advisor or Broker?
- Investment Advisor Defined
- Broker Defined
- So What's the Difference?
- So What's the Difference?
- Test #2—Pure Independent versus Independent and Broker
- Test #3—Proprietary Funds versus No Proprietary Funds
- A Final Thought on Conflicts
- Advisor Selection Issue #3—Competence
- Competence Check #1—Do the Advisor's Credentials Meet Your Needs?
- Competence Check #2—Is the Advisor Right for You?
- Competence Check #3—Is the Advisor Following a Process That You Agree With?
- A Final Thought on Advisors—Principles
- Avoiding Mistake #5—Choosing the Wrong Advisor
- Notes
- MISTAKE #6: No Mistaking
- Rule #1: Have a Clearly Defined Plan
- Rule #2: Avoid Asset Classes That Diminish Results
- Cash— The Illusion of Safety
- The Illusion of Gold as a Way to Grow Wealth
- Rule #3: Use Stocks and Bonds as the Core Building Blocks of Your Intelligently Constructed Portfolio
- Rule #4: Take a Global Approach
- Rule #5: Use Primarily Index-Based Positions
- Rule #6: Don't Blow Out Your Existing Holdings
- Rule #7: Be Sure You Can Live with Your Allocation
- Rule #8: Rebalance
- Rule #9: Revisit the Plan
- The Ultimate Rule: Don't Mess It Up!
- Portfolio Example
- The “I Want to Beat the Market” Portfolio
- The “I Need 7 Percent to Hit My Long-Term Retirement Goal” Portfolio
- The “Get Me What I Need for the Rest of My Life with the Least Volatility Possible” Portfolio
- The “I Have More Money Than I Will Ever Need and I Want It to Grow with Minimal Volatility” Portfolio
- The “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
- A Path to Success: Intelligent Portfolio Construction
- Notes
- You're the One
- CONCLUSION: Let's Roll!!
- References
- Index
- End User License Agreement
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