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This book is a must read for all investors. Author Larry Swedroe has demonstrated once again how he has a full understanding of the average investor’s situation, by listing 77 real-life mistakes that all of us have encountered at one time or another.
What’s more, Mr. Swedroe also takes the time to provide examples of where the mistakes listed have damaged investors’ situations, as well as to show how the investors could have avoided the mistakes.
Larry Swedroe, for the uninitiated, is a best-selling author of many books which explain his concepts of investing – including The Only Guide series, The Quest for Alpha, and others. These books cover primarily passive investing, or investing without active management, and as such he is a sort of guru in the self-managed investment world.
The listed mistakes in this book include everything from hindsight bias (believing after the fact that a particular occurrence was predictable) to believing that there are experts who can predict the future, as well as believing “this time it’s different”.
The list of the types of mistakes is broken up into four categories: Understanding and Controlling Human Behavior is Important for Investment Success; Ignorance is Not Bliss; Mistakes Made When Planning an Investment Strategy; and Mistakes Made When Developing a Portfolio.
Anyone who owns an IRA or invests in a 401(k) can benefit from this list of mistakes. Often these mistakes can be a part of our investing life without even knowing it – like having too many eggs in one basket (it’s not as easy realize as you think), or being too conservative (it’s easier to do than you think). Swedroe’s insights are helpful in explaining how the mistake can come to pass, as well as how to avoid these mistakes in the future.
All of this is designed to help you to become a better, more successful and less-stressed investor… all the way down to the last mistake – Do You Keep Repeating the Same Mistakes? Do yourself a favor and pick up a copy – it will be well worth the effort and your investing habits will be much better off for it.