Monday, November 2, 2020

How to Really Ruin Your Financial Life and Portfolio

Ben Stein is an economist, movie and television personality, and prolific writer on financial matters.  I recently read his book How to Really Ruin Your Financial Life and Portfolio.  Stein has written extensively about the smart ways for most people to invest, just to watch so many of these people lose their way and lose money.  This book pretends to advise people to make these common mistakes, but is really intended to inoculate investors against these mistakes.

The book covers a wide range of bad investment ideas including trading frequently, forex trading, stock-picking, market-timing, going with your gut, hedge funds, commodities, margin, short-selling, believing financial media “experts,” and many more.  After explaining why these ideas don’t work for other people, he assures the readers that they’re special and will succeed anyway.

In discussing the excitement of commodities trading, Stein’s understatement about some personal experience made me laugh: “Your humble servant has gotten a margin call.  It can change your day a lot.”

This short book is well-written making it an easy read that helped me solidify my decisions to avoid the mistakes Stein discusses.  I suspect it would be even more valuable for those with less investment knowledge who don’t know the many pitfalls of seeking exciting ways to invest.

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