Grow your wealth and invest with confidence and know-how using this simple, ten-question framework from investing guru and podcast host David Stein
You understand the basics of investing. Now it's time to invest like a professional for greater profits. Money for the Rest of Us offers a ten-question template that helps you decide which asset classes and investment vehicles you should pursue in greater depth in order to improve investment performance and avoid costly mistakes. Providing a templated framework based on ten basic questions, it guides you through the process of:
. Determining expected return
. Understanding the difference between investing, speculating, and gambling
. Building a diversified portfolio without getting bogged down in the minutiae of Modern Portfolio Theory
. Deciding when to invest in ETFs or other investment vehicles
. Determining whether gold, cryptocurrencies, rental real estate, or other types of investments make sense. And much more
Making Investment Mistakes Is Normal
You Are a Portfolio Manager
A Different Kind of Investing Book
What You Will Learn
1 WHAT IS IT?
If We Can't Explain an Investment, Then We Shouldn't Invest
The Primary Reason to Buy an Individual Stock
If You Can't Explain It, Don't Invest
Who Is Selling It?
We May Not Know as Much as We Think
Dealing with Unknowns
Complex Adaptive Systems
Reacting to Available Information
Why Accurately Predicting the Future Is So Difficult
Investing on the Leading Edge of the Present
The Math and Emotion of Investing
An Investing Framework
2 IS IT INVESTING, SPECULATING, OR GAMBLING?
A Simple Filter for Segmenting the Investing Universe
What Is Investing?
What Is Speculating?
Attempting to Day-Trade
What Is Gambling?
3 WHAT IS THE UPSIDE?
Rules of Thumb for Estimating Investment Returns
A Flawed Financial Plan
Rules of Thumb
Estimating Bond Returns
Estimating Stock Returns
How to Estimate Returns in Your Portfolio
A More Reasonable Financial Plan
4 WHAT IS THE DOWNSIDE?
Rules of Thumb for Evaluating Risk
Navigating the Global Financial Crisis
What Is Risk?
Maximum Drawdowns and Recoveries
The Potential Devastating Impact of Large Portfolio Losses
Why Assets Fall in Price
How to Manage Risk in Your Portfolio
5 WHO IS ON THE OTHER SIDE OF THE TRADE?
Evaluating What the Seller Knows About an Investment
With Whom Are You Trading?
Financial Markets Are Increasingly More Competitive
Active Manager Underperformance
Are Markets Efficient?
How to Balance Active and Passive Investing in Your Portfolio
6 WHAT IS THE INVESTMENT VEHICLE?
Evaluating Exchange-Traded Funds, Mutual Funds,
and Other Investment Securities
Applying the Investment Framework
Evaluating Investment Vehicles
7 WHAT DOES IT TAKE TO BE SUCCESSFUL?
Identifying What Drives Investment Outcomes
Multiple Return Drivers
8 WHO IS GETTING A CUT?
Managing Fees and Taxes
Types of Investment Expenses
Managing Investment Fees
Retaining a Financial Advisor
Rebalancing Your Portfolio
Inflation and Asset Allocation
How to Manage Investment Costs in Your Portfolio
9 HOW DOES IT IMPACT YOUR PORTFOLIO?
Asset Allocation Using Modern Portfolio Theory
The Asset Garden Approach to Asset Allocation
International Stocks and Bonds
How to Allocate Assets in Your Portfolio
An Alternative Approach
10 SHOULD YOU INVEST?
Applying the Investment Framework
Market Timing Versus Risk Management
Socially Responsible Investing
Piecemeal Portfolio Managers