Cover image for Rational investing in irrational times : how to avoid the costly mistakes even smart people make today
Rational investing in irrational times : how to avoid the costly mistakes even smart people make today
Swedroe, Larry E.
Personal Author:
First edition.
Publication Information:
New York : Truman Talley Books, [2002]

Physical Description:
xviii, 334 pages : illustrations ; 24 cm
Format :


Call Number
Material Type
Home Location
Item Holds
HG4529.5 .S937 2002 Adult Non-Fiction Non-Fiction Area

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It's well known that the technology world is changing at a rapid pace due in part to innovations in computers, the Internet, telecommunications, and biotechnology. It is less well known that the financial world is in a far different place than it was just a few years ago as witnessed by the bursting and NASDAQ bubbles in March 2000. But even when financial markets change-especially when the change is irrational-investors need to return and hold fast to the basic principles of prudent investing. Rational Investing in Irrational Times is a timely new handbook for every investor today. Using a question and answer format, rising star Larry Swedroe identifies the many mistakes even the smartest investors make whether markets are strong or troublesome. He attributes almost all current mistakes and losses to investors' human vulnerability (a tendency to stray from proven investment principles), a lack of investing experience, faulty investment strategies, or errors of portfolio development. Unlike most investment books, the author further shows how investment performance can be greatly improved by building a globally diversified portfolio of passive index funds and/or Exchange Traded Funds consisting of multiple asset classes. Apart from offering a winning strategy, Rational Investing in Irrational Times presents an efficient and proven way to avoid the most common (and costly) mistakes investors make.

Author Notes

A native New Yorker, Larry E. Swedroe graduated from New York University with an MBA in finance. Author of The Only Guide to a Winning Investment Strategy You'll Ever Need and What Wall Street Doesn't Want You to Know , Swedroe lives in St. Louis, Missouri, where he is head of research and a principal in the firm of Buckingham Asset Management.

Reviews 2

Publisher's Weekly Review

Swedroe, a principal in the firm of Buckingham Asset Management and author of What Wall Street Doesn't Want You to Know, believes that many investors listen to the "experts" instead of doing their own homework when they're choosing investments. People thus make costly mistakes that could have been avoided if they had understood the rules of investing. According to Swedroe, that means understanding that following the herd (e.g., investing in dot-com or tech stocks) and relying on the experts portfolio or mutual fund managers is not the right strategy for most individual investors. "The only way to take control over the risk and expected returns of a portfolio is to use index funds, ETFs [exchange traded funds], or passively managed funds as the building blocks of a portfolio," he says. Swedroe obviously knows this subject well; the book is full of citations of academic studies related to investor behavior and statistics about stock market performance. He also includes a thorough glossary. However, the title and subtitle are somewhat misleading browsers picking up the book may expect nuggets of practical advice on how to keep their money safe in unpredictable markets and economic downturns. This advice is here, but it's buried among pages of references to studies and statistical data. Swedroe's belief that the investment community misleads the average Joe is appealing. Regrettably, his message is overwhelmed by unnecessary data and references that diminish its usefulness. Agent, Sam Fleishman. (June 17) (c) Copyright PWxyz, LLC. All rights reserved

Library Journal Review

Investment professional Swedroe here presents and analyzes 52 common investing mistakes. For example, he lists the ninth mistake as "Do you avoid admitting your investment mistakes?" He explains that many investors will not sell a losing investment because doing so would admit error in making the original purchase. Through the device of the 52 mistakes, Swedroe analytically explores the psychology and mechanics of investing in innovative ways, e.g., he contends that short-term bonds are more effective for portfolio diversification than the customary long-term bonds. As in his previous What Wall Street Doesn't Want You To Know, Swedroe persuasively argues in favor of passive investing, using index mutual funds as the most effective long-term investment strategy. In this he agrees with luminaries like John Bogle (Bogle on Mutual Funds) and Burton Malkiel (A Random Walk Down Wall Street). Like those books, Swedroe's excellent work should be in all public libraries and in academic libraries with investment collections. Lawrence R. Maxted, Gannon Univ. Lib., Erie, PA (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.