Robert Reed Publishers
The 12 INVESTMENT MYTHS
Why Individual Investors Are Failing Miserably and How You Can Avoid Being One of Them
by Jack J. Calhoun Jr.
The stock market has never lost money for anyone. But millions of people have lost money in the stock market.
Sound like double-speak to you? It’s not. The fact is that if your holding period is long enough and your investment strategy prudent enough, you can overcome even the most extreme market volatility and bide your time while the stock market works to make you wealthy.
To accomplish this, however, you must confront and overcome a collection of common myths that seem quite logical but are, in fact, the perfect blueprints for investment failure. Most investors follow those blueprints to their financial demise.
The 12 Investment Myths shows you how to avoid being one of them.
So…why the disconnect?
In the short term, chaos and confusion often seem to reign supreme in the stock market. Most investors find this daily rollercoaster ride to be overwhelming and exhausting and allow their emotions to lead them in and out of the market like a bull by a nose ring.
Buy high. Sell low. Lather, rinse, repeat…
But there is another side to the stock market – the side that generates tremendous wealth over time for any investor who has the fortitude to invest intelligently and stay the course. Alas, it is a side that few investors ever experience.
Why is this so?
The reason is simple: Led by Wall Street and the media, investors have come to embrace a collection of widely held, completely mistaken beliefs about investing. At first glance these investment myths seem quite logical, and that is what makes them so dangerous. After all, who wouldn’t think that to be a successful investor you’ve got to:
— Focus on performance? (Myth!)
— Invest in good companies? (Myth!)
— Take action when the market goes into a swoon? (Myth!)
If these notions sound completely reasonable to you, then read on and learn how to identify and avoid the “common nonsense” that causes so many investors to fail!
Over time, the stock market creates great wealth for investors. And yet most investors do not become wealthy by investing in the stock market, instead having experiences that range from inadequate to disastrous.
The answer is found in a set of widely held, mistaken beliefs about what it takes to be a successful investor. At first glance, these investment myths seem grounded in logic. In reality, though, these beliefs provide investors with perfect blueprints for investment failure by encouraging in them an emotion-driven, trading-intensive mentality. These myths are propagated by Wall Street, which reaps huge profits from this behavior, and by the financial media that is starving for sensationalistic content.
As an independent investment advisor, Jack Calhoun has spent much of the past 15 years educating investors about the dangers of these mistaken ideas. In “The 12 Investment Myths”, he explores and debunks these myths one-by-one, and in the process sets investors on a path to harness the tremendous wealth-creation machine that is the stock market.
“Most people believe that investing is an analytical pursuit. But the truth is that emotional discipline plays a much greater role in determining investment success, because emotions drive behavior. Wall Street and the media play on investors’ emotions and lead them to believe assumptions that are very often the exact opposite of what is true.
“In The 12 Investment Myths, Jack Calhoun debunks these myths with humor and clarity, providing both experienced and novice investors alike with a wonderful path out of the wilderness created by Wall Street.”
~ John Nofsinger, Ph.D.
Associate Professor of Finance, Washington State University, Author of The Psychology of Investing
ABOUT THE AUTHOR: Jack J. Calhoun Jr. is the Managing Principal of Capital Directions, LLC (www.capdir.com), one of Atlanta’s oldest and largest fee-only investment advisors. He has written extensively on the subject of prudent investment management and has been featured in The Wall Street Journal, Investor’s Business Daily, The Atlanta Journal-Constitution, and other publications. E-mail Jack Calhoun at firstname.lastname@example.org