The Three Commandments of Investing
Amazon-exclusive content from author Jason Zweig
The First Commandment:
Thou shalt take no risk that thou needst not take.
Always ask yourself: Is this risk necessary? Are there safer alternatives that can accomplish the same objective? Have I studied the pros and cons of each before settling on this choice as the single best way to achieve my goal? Unless you ask, do not invest.
The Second Commandment:
Thou shalt take no risk that is not most certain to reward thee for taking it.
Always ask yourself: How do I know this risk will be rewarded? “Most certain to reward thee” does not mean that there is zero chance that you will not be rewarded. It does mean, and must mean, that you are highly likely to be rewarded. What is the historical evidence, based on the real experience of other investors, to suggest that this approach will actually succeed? During the periods in the past when it hasn’t worked – and every investment in history has gone through such dry spells, regardless of what the hypesters might tell you – how big were the losses? Unless you ask, do not invest.
The Third Commandment:
Thou shalt put no money at risk that thou canst not afford to lose.
Always ask yourself: Can I stand to lose 100 percent of this money? Have I analyzed not merely how much I will gain if I am right, but how much I can lose and how I will overcome those losses if I turn out to be wrong? Will my other assets and income be sufficient to sustain me if this investment wipes me out? If I lose every penny I put into this idea, can I recover from the damage? Unless you ask, do not invest.
"A little book with big advice. Jason Zweig . . . doesn't promise investors the moon, but in language that everyone can understand, he offers solid, common-sense steps to protect and improve their portfolios. . . Such advice is consistent with the bigidea of Zweig's book: If an investment looks too good to be true, it probably is. And he offers a useful process to help readers remember it."
--SmartMoney.com "There are very few in the financial media whose material I would consider recommended reading. Wall Street Journal columnist Jason Zweig is one of them, and his new book is one you should consider. His latest work adds to his reputation for books that not only provide important insights into the winning investment strategy, but are also good reads. This little book is filled with sage counsel from which even sophisticated investors can benefit. . . His book also provides advice on how to avoid many of the behavioral mistakes investors keep repeating. As William Bernstein, who wrote the forward, put it: 'Jason Zweig knows your financial demons, where they live, why they're making your poor, and how you can beat them."
--Larry Swedroe, CBS MoneyWatch
This book is a well written, fascinating page turner that I read in one sitting with a big bag of microwave popcorn. Yet, I don't just recommend a book because it was thoroughly enjoyable. The main reason to read this book is that it can put you on the path toward reaching financial freedom. But it's up to you and whether you'd rather spend your retirement years pursuing your interests, or spend them asking strangers if they'd like their value meal supersized.
--Allan Roth, Founder of Wealth Logic, and author of How A Second Grader Beats Wall Street
From the Inside Flap
With the value of the dollar sinking, bond yields drying up, giant investment banks collapsing, and stock markets crumbling, how can you ensure that your money will stay safe? By becoming better acquainted with the markets, the "professionals" who populate the field of finance, and, most importantly, yourself. While this may sound like simple advice, author Jason Zweig&;the investing and personal finance columnist for the Wall Street Journal&;knows how difficult this endeavor can be. But as a trusted voice in the financial community, he has helped thousands of investors achieve this goal, and now, with The Little Book of Safe Money, he wants to help you do the same.
The Little Book of Safe Money is the perfect guide for those trying to make their way through today's tough markets. Topics covered include everything from investing behavior and why our minds come with their own set of biases that often prove harmful to the use of financial advisors. But this reliable resource goes one step further than the rest by questioning an investor's true appetite for risk. The Little Book of Safe Money also debunks many of the myths that whirl around Wall Street with chapters like "Hedge-Fund Hooey."
Page by page, this timely book:
Outlines strategies for satisfying our ever-changing investment appetites while focusing on a long-term financial plan
Discusses both the external and internal forces that can hurt your investment performance&;and how you can better deal with them
Offers practical guidance, tools, and tips for surviving and thriving in a down market
And much more
In a straightforward and accessible style, Zweig peels away layer after layer of buzz words, emotion, and myths to reveal what's really going on in today's financial markets and how you can thrive under even the most adverse conditions. If you're serious about succeeding in today's turbulent markets, then The Little Book of Safe Money is what you should be reading.
From the Back Cover
"Jason Zweig knows your financial demons, where they live, why they're making you poor, and how you can beat them."
—William J. Bernstein
With the value of the dollar sinking, bond yields drying up, giant investment banks collapsing, and stock markets crumbling, how can you ensure that your money will stay safe? By becoming better acquainted with the markets, the "professionals" who populate the field of finance, and, most importantly, yourself.
While this may sound like simple advice, author Jason Zweig—the investing and personal finance columnist for the Wall Street Journal—knows how difficult this endeavor can be. But as a trusted voice in the financial community, he has helped thousands of investors achieve this goal, and now, with The Little Book of Safe Money, he wants to help you do the same.
The Little Book of Safe Money is the perfect guide for those trying to make their way through today's tough markets. Topics covered include everything from investing behavior and why our minds come with their own set of biases that often prove harmful to the use of financial advisors. But this reliable resource goes one step further than the rest by questioning an investor's true appetite for risk. The Little Book of Safe Money also debunks many of the myths that whirl around Wall Street with chapters like "Hedge-Fund Hooey."
Page by page, this timely book:
- Outlines strategies for satisfying our ever-changing investment appetites while focusing on a long-term financial plan
- Discusses both the external and internal forces that can hurt your investment performance—and how you can better deal with them
- Offers practical guidance, tools, and tips for surviving and thriving in a down market
- And much more
In a straightforward and accessible style, Zweig peels away layer after layer of buzz words, emotion, and myths to reveal what's really going on in today's financial markets and how you can thrive under even the most adverse conditions. If you're serious about succeeding in today's turbulent markets, then The Little Book of Safe Money is what you should be reading.
About the Author
JASON ZWEIG is the investing and personal finance columnist for the Wall Street Journal. Previously, he was a senior writer for Money magazine and a guest columnist for Time magazine and CNN.com. Before joining Money in 1995, Zweig was the mutual funds editor at Forbes. A frequent commentator on television and radio, Zweig is also a popular public speaker who has addressed the American Association of Individual Investors, the Aspen Institute, the CFA Institute, the Morningstar Investment Conference, and university audiences at Harvard, Stanford, and Oxford. He serves on the editorial boards of Financial History magazine and the Journal of Behavioral Finance. Zweig has a BA from Columbia College, where he was awarded a John Jay National Scholarship.
