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You are here today because your ancient ancestors cooperated to survive a brutal environment with life threatening predators. That herd mentality backfires when investing. Can you overcome your instincts to sell low and buy high with the rest of the crowd? Read a few paragraphs of Dale Buckner's book and you too can profit from the mistakes of others.

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Personal finance

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Publié par	First Edition Design Publishing
Date de parution	30 septembre 2014
Nombre de lectures	3
EAN13	9781622876891
Langue	English

Informations légales : prix de location à la page 0,0276€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

Extrait

Make Money, Think Rich, Take Advantage of the Natural Stupidity of Other Investors
Dale Buckner

First Edition Design Publishing
Make Money, Think Rich

Take Advantage of the Natural Stupidity
of Other Investors

First Edition Design Publishing
Make Money, Think Rich
Take Advantage of the Natural Stupidity of Other Investors

Copyright ©2014 Dale Buckner

ISBN 978-1622-876-94-5 HC
ISBN 978-1622-876-88-4 PRINT
ISBN 978-1622-876-89-1 EBOOK

LCCN 2014948450

August 2014

Published and Distributed by
First Edition Design Publishing, Inc.
P.O. Box 20217, Sarasota, FL 34276-3217
www.firsteditiondesignpublishing.com

ALL R I G H T S R E S E R V E D. No p a r t o f t h i s b oo k pub li ca t i o n m a y b e r e p r o du ce d, s t o r e d i n a r e t r i e v a l s y s t e m , o r t r a n s mit t e d i n a ny f o r m o r by a ny m e a ns ─ e l e c t r o n i c , m e c h a n i c a l , p h o t o - c o p y , r ec o r d i n g, or a ny o t h e r ─ e x ce pt b r i e f qu ot a t i o n i n r e v i e w s , w i t h o ut t h e p r i o r p e r mi ss i on o f t h e a u t h o r or publisher .

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that neither the Author nor the Publisher is held responsible for the reader’s actions. All investments hold risks that the reader should understand those risks thoroughly.

CFP ® and C ERTIFIED F INANCIAL P LANNER ™ are registered trademarks.
Dedication

I dedicate this book to our family, the Buckner clan, which can be traced back to 1570 England. I wonder if a member of our family saw an original Shakespeare play?

The dedication continues through today, to our granddaughter Arzana Buckner, born December 18, 2012...and to every teacher, artist, poet, lawyer, banker, and advisor in between.
Acknowledgements

First, my wife Adair and family, for allowing me the freedom to pursue my dream. Your support has meant the world to me.

Our son, Dr. Cameron Buckner, who helped transform the book into a much more scholarly endeavor. His PhD in Cognitive Science and keen insights into how the brain makes decisions has transformed virtually every page of the book. The book couldn’t make it into print without his help.

Fritz Meyer, for his help and encouragement. It’s always helpful to have a nationally renowned economist on your side. Mr. Meyer contributed generously in providing current economic data.

Dr. Matt Medeiros, for his early encouraging words, helping to bring my ideas to the page. His insights into managing money helped to mold more than one chapter.

A heartfelt thank you goes to my editor, Michael Dubes. His gentle counsel and encouragement was and is much appreciated.

My clients, radio show listeners, fellow financial planners, and everyone who listened to my theories until the story was finally told on these pages.
Foreword

Over the past 40 years, the stock market has delivered approximately 10% compounded annually. Someone investing just $1,000 a year and retiring at the end of that period would have accumulated $443,000. Investing $2,000 a year ¾ certainly a manageable amount for most baby boomers ¾ would have rendered a retirement accumulation of $886,000.

The almost magical power of long-term compounding allows almost anyone to achieve the goal of saving enough for retirement. Yet we read about legions of frightened baby boomers, afraid they will outlive the meager savings they’ve managed to set aside.

The question is why? Why have so many Americans come up short when they easily could have saved enough for a comfortable retirement?

The answer is what I call “investor bad behavior.” So many people make crucial behavioral mistakes during their accumulation years. And in most cases, they have no one to blame but themselves.

As an economist and stock market strategist, I’ve met thousands of financial advisors during my career and I’ve concluded that some advisors offer significantly more value than others. They are the advisors who effectively execute two distinct assignments for their clients: one technical and one psychological .

The technical piece is the discipline of Modern Portfolio Theory. Advisors delivering value avoid trying to beat the market with the tactical asset allocation guesswork that is so prevalent among the “experts” on Wall Street and the financial news networks. Many advisors, being human after all, want to appear smart, so they make these types of bets with their clients’ money in order to impress. Big mistake. I’ve observed that it’s often the old dogs in the business that have learned this lesson the hard way. Some of the young dogs…not so much.

Getting the technical piece right takes smarts, hard work, dedication and experience. Unfortunately, some advisors think that if they do this piece well their job is done. But it’s the second piece ¾ the crucial psychological piece ¾ that is often overlooked or eludes the advisor.

The psychological piece is instilling the conviction that staying the course with an investment program based in Modern Portfolio Theory is critical to long-term success.

Sounds simple, staying the course. But it isn’t. Not by a long shot. Remember the crash of 2008-09. In this book, Dale Buckner recalls helping a panic-stricken client at the bear-market bottom. “That was the day he almost became poor forever.” Here was a man who just couldn’t bear to watch the value of his nest egg contract any further. On his own, I have little doubt he would have capitulated at or near the bottom and he would, indeed, have become poor forever. That story had a happy ending because, like a great athlete, the advisor came up with a key play in the clutch. He earned many times his keep by keeping his client invested through that epic market collapse.

I can’t overstate the importance of an advisor’s ability to educate and counsel clients on the stay-the-course imperative. You can get all the technical aspects of investing right but if in the clutches of a bear market you get the psychological piece wrong, you’re toast.

Dale Buckner understands this and has blessed us with this insightful and entertaining treatise on how we’re seemingly “hard-wired” to do the dumb things that prevent us from investing successfully. Using comprehensive research, he shows us how to allow the deceptively simple practice of consistent saving and compounding to get the job done. I hope you’ll enjoy his observations as much as I have.

Fritz Meyer

Economist and former Senior Marketing Strategist for Invesco
Make Money, Think Rich

Take Advantage of the Natural Stupidity of Other Investors

Dale Buckner , CFP
Table of Contents

Prologue
God’s Plan
Ancestral Life
Introduction
An APT Strategy
Chapter One
Hunting and Gathering
Cognitive Dissonance
Chapter Two
Fight or Flight
The Ant and The Grasshopper
Bottom Sellers
Emergency Life Stage Reaction
On Impatience
Chapter Three
Predictions
Why is this so often the case?
The Boom Bust Cycle
The Annual Cycle
Taking Action
Final Thoughts on Predictions
Chapter Four
The Herd Mentality
Freeze
Run for Cover
Counterattack!
Gullibility
Tulip Mania and Other Folly
Tribal Loyalty
Chapter Five
Man’s View of the Future
The Cave
Society and Civilization
The Dark Side of Mankind
The Long View
The Final Word
Chapter Six
Have a Financial Plan from Graduation To Retirement
Preparing for Retirement
The Balanced Portfolio
Retirement Challenges
Debt and Excessive Spending
Working After Retirement
Divorce and Family Problems
Illness and Disability
Unemployment
Unwise Investment Choices
Excess Taxation
Conclusions
Chapter Seven
The Battle Plan
Paupers are Vulnerable
Create a Strong Foundation
Congratulations
Suggested Reading List
Prologue

God’s Plan

This book employs scientific evidence to examine why humans tend to make poor investment choices. The Bible also contains some insightful references to human flaws, including the book’s two main themes: fear and greed. The Bible also cites the destructive effects of envy and desire. I hope to someday translate my book into more theologically correct language. I believe I would draw the same conclusions.

I think it’s a good idea to ask God to give you peace. If you and your family have a solid financial plan with quality investments, it’s unlikely market news will frighten you into changing your plan or selling out at the market bottom. Scripture says to ask for peace. As a believer, you trust that God directed your actions when you set up the plan and chose your advisor. It’s unlikely that God will abandon you in your time of need.

Any dark thoughts or doubts you may have do not come from God. It's unlikely that God's message of love and peace will be distributed over the airwaves of the mass media and certainly not your financial news channel. Before fear or greed impels you to sell out at the bottom of a market correction or buy at the top of a speculative bubble, please pray about your actions. In the book I call that step "pause and reflect."

If you've built your strong foundation on the Rock, it's not likely that some passing correction in the financial markets will destroy your wealth. In your religious life, as in your financial life, keep your eye on the prize and ignore the noise.

We humans are flawed. Our imperfections show up in the way we invest. If my book helps you to find more peace, it can also help with your spiritual life. Trust in the process as you read about our ancestor's trials and triumphs. Perhaps you will see how the pieces all fit together.

In conclusion, God didn't create us with flaws by error. We are not a mistake. We are this way for a reason. God gave us free will and the ability to learn and profit from the mist