The 5 Mistakes Every Investor Makes and How to Avoid Them: Getting Investing Right

THE HANDS–ON GUIDE TO ALMOST MISTAKE–FREE INVESTING Dont let market timing, active trading, acting on bad information, making behavioral mistakes, or hiring the wrong advisor lead you on a path that could permanently damage your financial wellbeing. In The 5 Mistakes Every Investor Makes and How to Avoid Them wealth management expert Peter Mallouk reveals the most common and critical mistakes that investors make and provides a sensible framework for creating a winning investment portfolio in any market environment. This book offers an accessible reference to financial health and shows how investors can navigate the shifting variables and market dilemmas that often make investing a challenging enterprise. The 5 Mistakes Every Investor Makes and How to Avoid Them is filled with easy–to–apply investment techniques and reveals the critical importance of disciplined investment management. For any investor, no matter what their financial profile, this is a proven and reliable handbook for making the type of investment choices that can lead to a sound financial future.

PREFACE ACKNOWLEDGMENTS INTRODUCTION: THE MARKET WANTS TO BE YOUR FRIEND MISTAKE #1: MARKET TIMING The Idiots The Liars Why is it So Hard to Beat the Market? The Masses Get it Wrong, Over and Over Again The Media Gets It Wrong, Over and Over Again Economists Get It Wrong, Over and Over Again Investment Managers Get It Wrong, Over and Over Again Newsletters Get It Wrong, Over and Over Again Your Buddy Strategies That Don′t Sound Like Market Timing But Are Market Timing (Oh, and They Don′t Work, Either.) What Smart Investors Have to Say on Market Timing Knowing All This, Why Would Anyone Market Time? Corrections Bear Markets: An Overview When Bear Markets "Turn," They Make People on the Sidelines Look Silly The Market is Volatile – Get Used to It You Can′t Wait for Consumers to Feel Good Learning to Accept the Bear Markets Miscalculating the Risk of Market Timing But What if I Am Perfect? Lump Sum Investing versus Dollar Cost Averaging Learning to Fly Avoiding Mistake #1 – Market Timing MISTAKE #2: ACTIVE TRADING The History of Active Trading Active Investment Managers Lose to Indexing Fisher Investments Legg Mason Value Jim Cramer Newsletters Lose to Indexing Active Mutual Funds Lose to Indexing Survivor Bias (a/k/a Mutual Funds Perform Even Worse Than the Data Suggests) What About the Winners, Huh? What About the Winners?! Hedge Funds Lose to Indexing Endowments — Misperception of Performance Venture Capital (Sounds Sexy But Usually a Dog) The Taxman Commeth (a/k/a Dear Goodness it Gets Worse) Portfolio Activity Hurts Performance But Doesn′t Active Management Work in A Down Market? Why Indexes Win S&P 500, Here I Come! MISTAKE #3: MISUNDERSTANDING PERFORMANCE AND FINANCIAL INORMATION Misunderstanding #1: Judging Performance in a Vacuum Misunderstanding #2: Believing the Financial Media Exists to Help You Make Smart Decisions (aka, The Media is Killing You) Misunderstanding #3: Believing the Market Cares About Today Misunderstanding #4: Believing an All Time High Means the Market is Due for a Pullback Misunderstanding #5: Believing Correlation Equals Causation October is the Worst Month to Invest Sell in May and Go Away Misunderstanding #6: Believing Financial News Is Actionable Misunderstanding #7: Believing Republicans are Better for the Market than Democrats Misunderstanding #8: Overestimating the Impact of a Manager Misunderstanding #9: Believing Market Drops Are the Time to Get Defensive Avoiding Mistake #3: Misunderstanding Performance and Financial Information MISTAKE #4: LETTING YOURSELF GET IN THE WAY Fear, Greed and Herding The Overconfidence Effect Confirmation Bias Anchoring Loss Aversion Mental Accounting Recency Bias Negativity Bias The Gambler MISTAKE #5 WORKING WITH THE WRONG ADVISOR Most Advisors Will Do Far More Harm than Good Advisor Selection Issue #1: Custody Advisor Selection Issue #2: Conflict Advisor Selection Issue #3: Competence A Final Thought on Advisors: Principles Avoiding Mistake #5: Choosing the Wrong Advisor GETTING IT RIGHT Rule #1: Have a Clearly Defined Plan Rule #2: Avoid Asset Classes that Diminish Results Rule #3: Use Stocks and Bonds as the Core Building Blocks of Your Intelligently Constructed Portfolio Putting it All Together Rule #4: Take a Global Approach Rule #5: Use Primarily Index Based Positions Rule #6: Don′t Blow Your Existing Holdings Rule #7: Asset Location Matters Rule #8: Be Sure You Can Live With Your Allocation Rule #9: Rebalance Rule #10: Revisit the Plan The Ultimate Rule: Don′t Mess It Up! Portfolio Examples A Path to Success: Intelligent Portfolio Construction THE ULTIMATE MISTAKE CONCLUSION: LET′S ROLL! REFERENCE LIST

PETER MALLOUK, JD, MBA, CFP, is the President and Chief Investment Officer of Creative Planning and affiliated companies. Mallouks companies provide comprehensive wealth management services to its clients, including investment management, financial planning, charitable planning, retirement plan consulting, tax, and estate planning services. He has been named the #1 independent financial advisor in America on Barron s list and his company has been named the #1 independent wealth management firm in America by CNBC.