Ken Weber - Dear Investor, What the HELL are You Doing?: Smart and Easy Ways to Fix the Mistakes You Make With Your Money

Published by Greenleaf Book Group Press
Austin, Texas
www.gbgpress.com

Copyright 2015 Ken Weber

All rights reserved.

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eBook ISBN: 978-1-62634-162-3

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ISBN: 978-1-62634-161-6

Dedicated to Neela.
The $30 engagement ring I bought in 1972 was the best investment I ever made.

This book is personal. No one told me to write it. No one promised to read it. Ive written it because I needed to write it. Its from the heart. I cant keep witnessing all the mistakes good people make without at least trying to help.

This book is for you. Do you think thats a silly statement since I dont know you? Think again. I do know one thing about youI know that you picked up this book because you must have some interest in money matters. And I know that everyone makes investing mistakeseven if they dont invest! (Not investing is almost always a mistake.)

Small investors make mistakes. Big investors make mistakes. New investors screw up, and highly experienced investors do lots of dumb things too. This is absolutely trueI could fill an entire book just citing all the examples of sophisticated investors kicking themselves for making boneheaded decisions.

If you felt a jolt when you first read the title of this book, great! This book is written as a wake-up call. As president of a registered investment advisor firm since 1987, I am privy to a constant stream of personal financial information, and I am continually amazed by the questionable decisions intelligent and otherwise successful people make with their investments.

Thats why after years of doing this, I can say with near certaintythis book is for you.

A doctor who, in her professional life, would never dream of trying something different with one of her patients might very easily slide into such a foolish approach when handling her own portfolio. A carpenter who never fails to measure twice and cut once in his daily routine might do something impulsive in the stock market in an attempt to reap a quick fortune.

Dont kid yourself. All professional and vocational lines blur in any attempt to profile the investors who make the mistakes youll read about in the pages that follow. The sabotaging of ones own portfolio is a thoroughly democratic venture.

This book is therefore written for cardiologists and carpenters alikeand for disappointed, unsuspecting investors everywhere who may have committed, or will commit, any or all of the following blunders:

• Sinking hard-earned money into a hot tip from a friend
• Buying a stock because you read an advertisement
• Failing to diversify your assets
• Missing big gains while waiting for the right time to invest
• Micro-managing your portfolio
• Completely ignoring your portfolio
• Buying an annuity without fully understanding its costs
• Playing the futures market with your kids college fund

Are any of these familiar? This list is just a start; a full inventory of common investing errors goes on and on. Maybe youve made some of these mistakes. Maybe someone near and dear to you has made one or more of them.

Any of these mistakes can, at first blush, seem innocent enough. But once you understand the fallacy behind each of the common land mines discussed in this book, youll be able to turn your portfolio around for the better.

And although I succinctly reveal the things you should do, you may wonder why Ive chosen to concentrate on investing mistakes. Why focus on negativeson those things you shouldnt do? Why not just come clean, and let you know how to invest so that you can get on with your busy life?

The answer to that is easy

If you clear away all the mistakes, smart, rational investing is not terribly difficult.

On any given day, you can walk into your local bookstore and find dozens of books that tell you how to invest. In fact, you can locate hundreds of them right now by clicking on Amazon.com. This is not one of those books. I have no desire to throw my hat into a ring overcrowded with volumes of magic recipes that allegedly show readers how to score a windfall. Like the latest fad diet books, if those recipes for investment success actually worked, you wouldnt see new ones popping up every week. The advice in those books is sometimes good, sometimes misguided, and often too difficult to implement. In fact, sound investing is very much like changing your eating habitsonce you strip away the bad stuff, reaching your goal becomes reasonably easy.

Besides, such advice changes from year to year, or even from week to week.

Over the three decades of my financial career (and Ive been a stock market geek since I was a teenager), Ive seen the so-called conventional wisdom on various types of investments swing this way and that. What had been accepted as dogma is suddenly upended by a new research paper.

Heres something most people dont realize: there is a river of financial information published every single day. Literally thousands of journals, white papers, magazines, newspapers, and blogs spew out facts, near-facts, and opinion. And much of it is published precisely because it counters previous conventional wisdom.

Even if you allow that each argument has merit under certain circumstances, how are you supposed to arrive at the true wisdom? And is arriving at that answer ultimately going to make you any money? Or is the effort even worth your time?

Youll read more about this later on, but for now suffice it to say, if the perceptions of the medical establishment were as scattered as the investment community, we might expect to wake up tomorrow morning with our livers on the wrong side of our bodies.

Before we get started, you should realize that just as there are no magic pills to help you lose weight permanently, there are no quick fixes that will make you rich in a few months. Im not going to send you running to the Toronto Stock Exchange to chase down mining stocks, or to NASDAQ in search of the most promising IPO. Im not going to recommend any one sector of the economy over the other.

I wont do that because the markets are in a constant state of flux, and more importantly, thats not what this book is about.

While I eventually will offer my prescription for how to structure your nest egg, this is essentially a book about what not to do with your hard-earned money. And for most investors Ive met, thats the better advice.

Since your investment mistakes are inextricably tied to your outlook and how you think about your money, I begin with a discussion in on Great Expectations. In my professional life, Ive seen too many investors derailed by impatience, gullibility, hubris, impulsiveness, and by placing their confidence in all the wrong sources. If you approach your investments with reasonable expectations, you can avoid these destructive approaches.

But now that Ive grabbed your attention with a promise to reveal your investment mistakes, the very last thing I want is for you to think of me as the one who merely chides you about all the wrong things you do with your portfolio. The very best ball players, the finest musicians, and the most successful executives all need a coach at one time or another in their careers. In that spirit, I want to be the investment coach at your side, not the cranky money guy on your back. Best to think of me the same way you think of a golf coach who implores you to make a subtle adjustment to your swing, or the executive coach who helps you tweak your five-year plan.