The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes

The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes

Language: English

Pages: 224

ISBN: 1118445015

Format: PDF / Kindle (mobi) / ePub

Exposes the truth about common investing myths and misconceptions and shows you how the truth shall set you free—to reap greater long-term and short-term gains

Everybody knows that a strong dollar equals a strong economy, bonds are safer than stocks, gold is a safe investment and that high PEs signal high risk...right? While such "common-sense" rules of thumb may work for a time as investment strategies, as New York Times and Wall Street Journal bestselling author, Ken Fisher, vividly demonstrates in this wise, informative, wholly entertaining new book, they'll always let you down in the long run. Ken exposes some of the most common—and deadly—myths investors swear by, and he demonstrates why the rules-of-thumb approach to investing may be robbing you of the kinds returns you hope for.

  • Dubbed by Investment Advisor magazine one of the 30 most influential individuals of the last three decades, Fisher is Chairman, and CEO of a global money management firm with over $32 billion under management
  • Fisher's Forbes column, "Portfolio Strategy," has been an extremely popular fixture in Forbes for more than a quarter century thanks to his many high-profile calls
  • Brings together the best "bunks" by Wall Street's Master Debunker in a fun, easy-to-digest, bite-size format
  • More than just a list of myths, Fisher meticulously explains of why each commonly held belief or strategy is dead wrong and how damaging it can be to your financial health
  • Armed with this book, investors can immediately identify major errors they may be committing and adjust their strategies for greater investing success
















10% strategy and the 5%-CD-forever plan are both unsustainable myths. c07.indd 73 02/01/13 2:56 PM c07.indd 74 02/01/13 2:56 PM ter Eig h t ap Ch High Dividends for Sure Income • “To ensure retirement income, I’ll just invest in high-dividend stocks.” LONGEVITY only will continue in the future. (See Chapter 2.) Which means folks are likely to spend longer in retirement now than ever— maybe much longer than most anticipated. Getting enough cash flow to fund retirement is often a top

by “safe.” There’s no technical definition—there’s huge room for interpretation. For example, one person might think “safe” means a low level of expected shorter-term volatility. No wiggles! Another person might think “safe” means an increased likelihood he achieves long-term goals, which may require a higher level of shorter-term volatility. Bonds Are Volatile, Too People often make the error of thinking bonds aren’t volatile. Not so. Bonds have price volatility, too. And their prices move in

forgiven for thinking low unemployment causes economic growth. c12.indd 118 07/01/13 10:32 AM High Unemployment Kills Stocks [119] If that were true, low unemployment would be a selfperpetuating growth machine. But that’s not the case. Recessions start, always, at or near cyclical unemployment lows. Which isn’t what would happen if low unemployment were an economic panacea. Rather, the data prove low unemployment doesn’t prevent recessions, and high unemployment doesn’t prevent economic

growth in Q1 2008 to the trough in Q2 2009. And it shows how much of total spending each component comprised at the recession’s end. By far, the largest component of consumer spending (67.2%) is on services. During the 2007–2009 recession—which was steep by history’s standards—services c12.indd 122 07/01/13 10:32 AM Exhibit 12.4 Components of Private Consumption—Services Are Huge and Stable Percent of Consumption (Q2 09) Gross Domestic Product Personal Consumption Expenditures 100% Q1 08 to

60-year-old man in the US, Social Security estimates your average life expectancy is another 21 years on average. If you’re a 60-year-old woman, your estimated average life expectancy is another 24 years. Is that your time horizon? Maybe. Do you think you’re average? If you’re in good health, active and have parents still alive in their late 80s, you could easily beat the odds— that could mean a 30-year (or more) time horizon. Exhibit 2.2 Life Expectancy Keeps Getting Longer 90 Average Male

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