The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes

"By demolishing so many wealth–destroying myths, Ken Fisher has performed a priceless service for investors at a time when they need all the help they can get."

Steve Forbes, Chairman and Editor–in–Chief, Forbes Media

Learn the truth about common investing myths and the truth shall set you free

Have you ever asked if what you believe to be true actually is? If not, why not? A huge amount of what most investors believe is actually wholly or partially untrue utter market myth leading to, at times, costly errors.

But investors don′t follow myths because they know they′re wrong. They follow myths because they seem like smart, common sense, "everyone knows" market wisdom. How can you tell the difference between myth and reality?

By questioning. And in The Little Book of Market Myths, CEO and bestselling author Ken Fisher questions everything. From the belief that bonds are always safer than stocks to the idea that America′s big debt must spell economic doom. He stamps out rules of thumb and overturns decades of widely accepted but ultimately misguided market wisdom.

In doing so, he shows readers how they, too, can question everything and see the world more clearly. And by seeing the world more clearly, they can begin seeing better investing results.

Read The Little Book of Market Myths yourself and start investing based on reality, not "everyone knows" mythology.

Preface ix

Chapter One Bonds Are Safer Than Stocks 1

Chapter Two Asset Allocation Short–Cuts 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! 67

Chapter Eight High Dividends for Sure Income 75

Chapter Nine The Perma–Superiority of Small–Cap Value 83

Chapter Ten Wait Until You re Sure 93

Chapter Eleven Stop–Losses Stop Losses 105

Chapter Twelve High Unemployment Kills Stocks 113

Chapter Thirteen Over–Indebted America 131

Chapter Fourteen Strong Dollar, Strong Stocks 153

Chapter Fifteen Turmoil Troubles Stocks 161

Chapter Sixteen News You Can Use 171

Chapter Seventeen Too Good to Be True 181

Notes 191

Acknowledgments 201

About the Authors 205

KEN FISHER is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 28–year tenure of high–profile calls makes him the fourth longest–running columnist in Forbes′s 90–plus–year history. He is the founder, Chairman and CEO of Fisher Investments, an independent global money management firm managing tens of billions for individuals and institutions globally. Fisher is ranked #271 on the 2012 Forbes 400 list of richest Americans and #764 on the 2012 Forbes Global Billionaire list. In 2010, Investment Advisor magazine named him among the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award–winning "Cognitive Biases in Market Forecasting." He has also published nine previous books, including national bestsellers The Only Three Questions That Count, The Ten Roads to Riches, How to Smell a Rat, Debunkery and Markets Never Forget (But People Do), all published by Wiley. Fisher has been published, interviewed and/or written about in many major American, British and German finance or business periodicals. He has a weekly column in Focus Money, Germany′s leading weekly finance and business magazine.

LARA HOFFMANS is Vice President of Content at Fisher Investments, managing editor of MarketMinder.com, a regular contributor to Forbes.com and coauthor of the bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, How to Smell a Rat, Debunkery and Markets Never Forget (But People Do).