Debunkery. Learn It, Do It, and Profit from It -- Seeing Through Wall Street's Money-Killing Myths

  • ID: 2212891
  • Book
  • 234 Pages
  • John Wiley and Sons Ltd
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Legendary money manager Ken Fisher outlines the most common and costly mistakes investors make

  • Small cap stocks are best for all time. Bunk!

  • A trade deficit is bad for markets. Bunk!

  • Stocks can′t rise on high unemployment. Bunk!

Many investors think they are safest following widely accepted Wall Street wisdom but much of Wall Street wisdom isn′t so wise. In fact, it can be costly bunk.

In Debunkery, Ken Fisher named one of the 30 most influential individuals of the last three decades by Investment Advisor magazine details why so many investors fail to get the long–term results they desire. The short answer is many investors fail to question if what they believe is true and are therefore blinded by tradition, biases, ideology, or any number of cognitive errors.

Your goal as an investor shouldn′t be to be error–free that′s impossible. Rather, to be more successful, you should aim to lower your error rate. Debunkery gets you started by debunking 50 common myths but that′s just the beginning. It also gives you the tools you need to continue to do your own debunkery for the rest of your investing career.

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Acknowledgments ix

Introduction: Debunkery Made Easy xiii

PART 1 Basic Bunk to Make You Broke 1

Bunk 1 Bonds Are Safer Than Stocks 5

Bunk 2 Well–Rested Investors Are Better Investors 9

Bunk 3 Retirees Must Be Conservative 13

Bunk 4 Age Equals Asset Allocation 17

Bunk 5 You Should Expect Average Returns 20

Bunk 6 "Capital Preservation and Growth" Is Possible! 23

Bunk 7 Trust Your Gut 26

Bunk 8 One Big Bear and You re Done 30

Bunk 9 Make Sure It s a Bull Before Diving In 34

Bunk 10 Growth Is Best for All Time. No, Value. No, Small Caps 39

Bunk 11 A Good Con Artist Is Hard to Spot 44

PART 2 Wall Street "Wisdom" 49

Bunk 12 Stop–Losses Stop Losses! 51

Bunk 13 Covered Calls . . . Gotcha Covered 54

Bunk 14 Dollar Cost Averaging Lower Risk, Better Returns 57

Bunk 15 Variable Annuities Are All Upside, No Downside 60

Bunk 16 Equity–Indexed Annuities Better Than Normal Annuities 65

Bunk 17 Passive Investing Is Easy 68

Bunk 18 Do Better With Mutual Funds by Sending Your Spouse on a Shopping Spree 72

Bunk 19 Beta Measures Risk 75

Bunk 20 Equity Risk Premiums Forecasting Future Returns With Ease 80

Bunk 21 When the VIX Is High, It′s Time to Buy 84

Bunk 22 Be Confident on Consumer Confidence 88

Bunk 23 All Hail the Mighty Dow! 92

PART 3 "Everyone Knows" 99

Bunk 24 So Goes January 101

Bunk 25 Sell in May 104

Bunk 26 Low P/Es Mean Low Risk 107

Bunk 27 A Strong Dollar Is Super 112

Bunk 28 Don t Fight the Fed 116

Bunk 29 Interest Pays Dividends 120

Bunk 30 Buy a 5% CD for 5% Cash Flow Easy! 123

Bunk 31 Baby Boomers Retire, World Ends, Etc. 126

Bunk 32 Concentrate to Build Wealth 130

PART 4 History Lessons 135

Bunk 33 Pray for Budget Surpluses 137

Bunk 34 High Unemployment Is a Killer 143

Bunk 35 With Gold, You re Golden 148

Bunk 36 Stocks Love Lower Taxes 152

Bunk 37 Oil and Stocks Seesaw 158

Bunk 38 Swine Flu, SARS, Ebola, and Other Viral Disasters Make Markets Sick 163

Bunk 39 Consumers Are King 167

Bunk 40 Presidential Term Cycles Are Stock Market Voodoo 172

Bunk 41 My Political Party Is Best for Stocks 178

Bunk 42 Stock Returns Are Too High and Must Fall 182

PART 5 It′s a Great Big World! 187

Bunk 43 Foreign Stocks Just Feel So . . . Foreign 189

Bunk 44 Who Needs Foreign? 192

Bunk 45 Big Debt Is National Death 195

Bunk 46 America Can t Handle Its Debt 199

Bunk 47 Indebted to China 202

Bunk 48 Trade Deficits Make Deficient Markets 206

Bunk 49 GDP Makes Stocks Grow 211

Bunk 50 Terrorism Terrorizes Stocks 215

Notes 219

About the Authors 228

Index 229

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KEN FISHER is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 25–year tenure of high–profile calls makes him the fourth longest–running columnist in Forbes′s 90–plus year history. He is the founder, Chairman, and CEO of Fisher Investments, an independent global money management firm with over $32 billion under management (as of 6/30/10). Fisher is ranked #289 on the 2009 Forbes 400 list of richest Americans, and #721 on the 2010 Forbes Global Billionaire list. In 2010, Investment Advisor magazine named him as one of the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award–winning article, "Cognitive Biases in Market Forecasting," and has published six previous books, including the New York Times and the Wall Street Journal bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, and How to Smell a Rat, all of which are published by Wiley. Fisher has been published, interviewed, and/or written about in many major American, British, and German finance or business periodicals. He has a weekly column in Focus Money, Germany′s leading weekly finance and business magazine.

LARA HOFFMANS is a content manager at Fisher Investments, a contributing editor of MarketMinder.com, and coauthor of the bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, and How to Smell a Rat.

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