Balaban RC - Investment mistakes even smart investors make and how to avoid them

Investment Mistakes Even
Smart Investors Make and
How to Avoid Them

More advance praise for
Investment Mistakes Even Smart Investors Make
and How to Avoid Them

The truism that investments perform better than investors has long since been fully confirmed. Part of the reason is that the costs of investing over the long term are confiscatoryWall Street wins; investors lose. The other part is that the behavior of investorsnotably investors in mutual fundsis so counterproductive. They are too often their own worst enemies, making foolish mistake after foolish mistake. Larry Swedroes wonderful new book lists fully 77 of the worst of these commonplace errors. (I agree with nearly all of the authors warnings; in fact, I might even add a few of those on my own list!) Using Investment Mistakes... as your checklist, you cannot help but improve your share of the financial market returns to which you are entitled.

John C. Bogle, Founder, The Vanguard Group

While always spot on, most of Larrys books to date have been about the overwhelming evidence that investors shoot themselves in the foot. In this book he and RC Balaban delve much deeper into why the shots are fired to begin with. Together the body of work forms a nearly complete picture of how and why investors avoid passive investing and cost themselves trillions. As a money manager who hopes they continue in these erroneous practices, I can only beg Larry and RC to halt publication immediately.

Cliff Asness, Ph.D, Founding and Managing
Principal, AQR Capital Management

Swedroe and Balaban use their unique ability to demystify what it is that so often makes smart people do dumb things as investors. Unfortunately for these investors, the authors have isolated 77 types of common investing mistakes. Thus, the odds of these investors being successful are indeed small. But, the authors come to the rescue by providing the simpler path for successful investing that avoids the common types of investing mistakes.

John A. Haslem, Professor Emeritus of Finance at the
University of Maryland, and editor of Mutual Funds: Portfolio
Structures, Analysis, Management, and Stewardship

In this, his eleventh book, Larry and coauthor RC identify and discuss 77 investing mistakes and provide guidance to help you avoid them. Knowledge is power, and this book is filled with helpful information. Read it and reap!

Mel Lindauer, Forbes columnist and coauthor of
The Bogleheads Guide to Investing and
The Bogleheads Guide to Retirement Planning

Swedroe and RC Balaban have identified 77 common mistakes that investors make. In clear and concise language readers learn details of each mistake and why it is a mistake. In my opinion, this book deserves a place on every investors bookshelf.

Taylor Larimore, coauthor of
The Bogleheads Guide to Investing

Many people dont know what they dont know, which is why they are often their own worst enemies when it comes to investing. The authors show all investorsboth smart and not so smartin a series of short lessons how to avoid 77 investment mistakes commonly made by them. These lessons have particular relevance and value now with world financial markets in turmoil. All investorsyes, even those who think they know it allwill benefit enormously from reading this absorbing and timely book.

W. Scott Simon, JD, CFP, AIFA, author of
The Prudent Investor Act: A Guide to Understanding,
and columnist, Morningstars Fiduciary Focus

Swedroe and Balaban provide sage advice through a series of simple stories. As an endowed professor of investments, my investment philosophy is based on four decades of academic and professional research, both my own and others. My philosophy mirrors their advice because they both embody this research. I encourage you to buy and read this book and follow its advice. It will make you a better investor.

Dr. William Reichenstein, CFA,
Pat and Thomas R. Powers Chair in Investment Management,
Baylor University, Hankamer School of Business

Compelling logic, practical wisdom, and memorable quotes. A sound strategy for? finding and adhering to your sweet spot on the efficient frontier between risk and expected return.

Professor Ed Tower, Professor of Economics, Duke University

So much of what goes wrong with our investment choices is self-inflicted through ill-conceived investment ideas and practices. Not only is this a valuable resource for both novice and experienced investors, it is also highly readable and even entertaining.

Edward R. Wolfe, Ph.D., Professor of Finance,
Western Kentucky University

The most sure fire way to improve investment results is to sidestep the multitude of ways to destroy value. Swedroe and Balaban take the reader on a journey well informed by behavioral finance, the developing field of financial planning, evidence- based investing, and stories of actual investors to give the reader a road map to confident wealth building.

John Montgomery, Founder and Chief Investment Officer,
Bridgeway Capital Management

It is unlikely that any investor will make all 77 mistakes out-lined in this book. But almost everyone is guilty of making at least a few of them, and it takes only a handful of uninformed or irrational decisions to do serious damage to a retirement nest egg. By showing us the dozens of ways investors can penalize themselves, Swedroe and Balaban reveal why so many investors without a simple and sustainable investment plan meet with disappointment.

Weston Wellington, Vice President,
Dimensional Fund Advisors

Larry E. Swedroe

RC Balaban

Copyright 2012 by Larry E. Swedroe and RC Balaban. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-07-178683-6
MHID: 0-07-178683-X

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