The Anxious Investor
Mastering the Mental Game of Investing
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4.0 • 1 Rating
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- $18.99
Publisher Description
A revelatory new guide to becoming a smarter investor, drawing upon behavioral psychology, economic modeling, and market history to offer practical advice for reaching your financial goals
"With the equity and fixed-income markets off to a rough start in 2022, investors might do well to review the lessons shared in Mr. Nations’s book." —Wall Street Journal
The human brain is ill-suited to making wise investment decisions. We are overconfident in our own knowledge and hunches, terrible at assessing risk, and prone to chasing financial thrills rather than measured long-term goals. Making matters worse, periods of severe market turbulence—whether the dotcom bubble of the late 90’s, the Great Recession a decade later, or the brief, vertiginous COVID crash of 2020—bring out our most irrational selves, at the exact moment when the consequences for investment mistakes are most severe.
Scott Nations has spent his career studying market volatility. His firm, Nations Indexes, is the world’s leading independent developer of volatility and option-enhanced indexes. In The Anxious Investor, he teaches readers how to understand markets, master their own fear, and make the most of their money. Drawing upon cutting-edge research in behavioral psychology, Nations shows that the secrets to excellent investing lie in mastering the quirks of human psychology. How are some investors able to make prudent decisions under pressure, while others rely on gut instinct to disastrous effect? How can we prepare for a market crash before it happens? And what can help us stay the course when the waters get choppy? Using the stories of three infamous market bubbles as his backdrop, Nations offers readers history’s hard-earned lessons about greed, volatility, and value.
Whether you’re saving for retirement, a home, or a child’s college education, The Anxious Investor offers a blueprint for achieving your goals. While we can never know exactly which financial surprises may loom ahead, here is an indispensable resource for investors to make sense of them.
PUBLISHERS WEEKLY
Investors can make bad decisions "because of the behavioral biases we're all subject to," advises Nations (A History of the United States in Five Crashes), president of the financial engineering firm NationsShares, in this useful guide to avoiding common financial mistakes. The key theme is that "the social aspect of investing... hinders success." To tackle the fear and irrationality that often accompany investing, he warns against a wealth of biases: there's the status quo bias, or "the irrational tendency to prefer choices that maintain the status quo even when other choices would leave us better off," which readers can counter by ensuring their portfolio is diversified; hindsight bias, which entails "fooling ourselves into thinking that we it coming because it is all so obvious now," though investors should remember they can never truly know what's coming; and overconfidence, which "may be the most dangerous." Along the way, he encourages tamping down harmful tendencies by using long-term analysis, reminding readers that "just because it happened recently doesn't mean it is normal." Nations's advice is grounded and practical, and the wealth of research backing it will leave readers feeling like they're in good hands. New and seasoned investors alike will find this worth a look.
