The Little Book of Market Myths

Boost your investment returns by dodging the most common investing mistakes

In the newly updated second edition of The Little Book of Market Myths: How to Profit by Avoiding the Mistakes Everyone Else Makes, celebrated investor and Fisher Investments' founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher insightfully explores many common myths costing investors dearly. Fisher provides a comprehensive guide to navigating the investment landscape more wisely, debunking widespread myths that lead to costly mistakes.

This edition delves deep into the frequent missteps made by both retail and professional investors, demonstrating how a better understanding and avoidance of these pitfalls can lead to improved long-term and short-term financial gains. Fisher critically examines why popular beliefs, such as the safety of bonds over stocks, the risk-free allure of gold, and the fear of high price-to-earnings ratios, are not only misguided but could be damaging your investment portfolio.

In the book, you'll:

• Learn why many commonly held investment beliefs are wrong and how avoiding them can enhance your financial health
• Gain insights into better investment decisions for both short-term gains and long-term growth
• Understand how to identify and correct the mistakes that could be costing you

The Little Book of Market Myths equips readers with the necessary tools to identify and sidestep the pitfalls that have ensnared countless investors. Whether you're a seasoned investor or new to the world of finance, this book is an invaluable resource for anyone looking to improve their understanding of the market and make more informed investment choices.

Preface ix

Chapter One Bonds Are Safer Than Stocks 1

Chapter Two Asset Allocation Shortcuts 17

Chapter Three Volatility and Only Volatility 27

Chapter Four More Volatile Than Ever 37

Chapter Five The Holy Grail – Capital Preservation and Growth 49

Chapter Six The GDP – Stock Mismatch Crash 55

Chapter Seven 10% Forever! 65

Chapter Eight High Dividends for Sure Income 73

Chapter Nine The Perma-Superiority of Small-Cap Value 81

Chapter Ten Wait Until You’re Sure 91

Chapter Eleven Stop-Losses Stop Losses 103

Chapter Twelve High Unemployment Kills Stocks 109

Chapter Thirteen Over-Indebted America 127

Chapter Fourteen Strong Dollar, Strong Stocks 145

Chapter Fifteen Turmoil Troubles Stocks 155

Chapter Sixteen News You Can Use 169

Chapter Seventeen Too Good to Be True 179

Notes 191

Acknowledgements 199

About the Authors 201

Ken Fisher is founder, Executive Chairman, and Co-Chief Investment Officer of Fisher Investments, a fee-only investment advisor managing over $265 billion for large pension plans, endowments, high-net-worth individuals, and foundations around the world. He writes regularly for Forbes, USA Today, the UK Financial Times, De Telegraaf, and Focus Money. He is the author of 11 books on investing and personal finance and is a New York Times bestselling author.

In this updated and newly revised second edition of the bestselling The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes, celebrated investor and Co-Chief Investment Officer at Fisher Investments, Ken Fisher, delivers yet another insightful and concise discussion of the most common investing myths that cost investors billions of dollars annually.

The author explains the mistakes and missteps most frequently made by retail and professional investors and how to reap greater long-term and short-term gains by sidestepping them. You’ll learn why bonds aren’t necessarily “safer” than stocks, why gold is not as risk-free as you might have been told, and why high price-to-earnings ratios aren’t as bad as you might think. Fisher explores why these myths—and others like them —might work as investing rules-of-thumb for a time and, more importantly, why they’ll almost always fail you in the end.

The Little Book of Market Myths brings together the best myth-busting available on Wall Street in a fun, easy-to-digest, and bite-size format that anyone can understand and apply. It also contains meticulous explanations of why each commonly held belief or strategy is dead wrong and just how much damage it might currently be doing to your long-term financial health. You can use it to identify the most significant errors that you’re making in your portfolio and make adjustments that could save you thousands, hundreds of thousands, or even millions of dollars.

Perfect for individual retail investors, The Little Book of Market Myths is also an essential resource for people with an interest in business, investing, finance, or the economy who seek to sharpen their understanding of the markets.

Avoid the most common investing mistakes and improve your investing returns

In the compelling updated and revised second edition of The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes, celebrated investor and Co-Chief Investment Officer at Fisher Investments, Ken Fisher, cuts through the fog of common investing myths that are costing investors billions each year. Fisher’s work shines a light on the widespread myths and misunderstandings that hinder investment success, offering readers a clear path to making better investment decisions.

Fisher meticulously debunks the myths that have misled both retail and professional investors, illuminating how to achieve superior long-term and short-term gains by avoiding these pitfalls. Through engaging examples, readers will discover the surprising truths behind the perceived safety of bonds over stocks, the supposed risk-free nature of gold, and the misunderstood implications of high price-to-earnings ratios. Fisher not only dissects these and other myths but explains why they occasionally seem to work and why they ultimately fail investors.

The Little Book of Market Myths is the quintessential guide to navigating the treacherous waters of investment myths, packed with insightful analysis and actionable advice. This book equips you to identify and correct the most detrimental missteps in your investment approach, safeguarding and enhancing your financial well-being.