Rational Investing in Irrational Times: How to Avoid the Costly Mistakes Even Smart People Make Today

by Larry E. Swedroe

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 dot.com 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.

Genres: Finance, Nonfiction, Money, Economics

352 pages, Hardcover

First published January 1, 2002

Reviews

[Kursad Albayraktaroglu · Rating 4 out of 5]

While the examples are a little outdated by now, this book is all that can be expected from Swedroe and more - pages and pages of solid investment wisdom backed by hard data. Some of the suggestions on diversification and allocation were very interesting and I don’t recall seeing them in any of the many investing books I have read. Four stars only because it needs an update for the 2020s, otherwise this is a five-star book that deserves a place on any investor’s bookshelf.