If You're So Smart, Why Aren't You Rich? : A Guide to Investing Fundamentals

Football is often described as a "game of inches." First downs, scoring, and in/out of bound decisions that can determine the outcome of the game can come down to fractions of an inch. Investing is similar: the difference between outperforming or underperforming the market may be a few fractions of a percentage point. Drawing from over thirty years in teaching, researching, and practicing investment fundamentals, Ben Branch succinctly states, "successful investing, define as outperforming the market averages, is not easy. And yet it is very much a game worth playing, particularly if you win." The key to being on the winning side is to understand the basic principles of investing--what it is and how it works--before making any decisions. In this highly practical, non-technical guide, Branch provides the building blocks of a multi-dimensional investing approach. First, he reviews the principle of compound interest, the foundation of all investment strategy and performance. Then, arguing that successful investing is a function of three types of activities--selection, timing, and execution--he introduces the reader to stocks, bonds, options, mutual funds, real estate, futures, and all of the other elements of the market. In addition to covering well-known investments in detail, he explains lesser-known opportunities, such as bankruptcies and takeovers. Special topics include the effects of macroeconomic trends and the subtleties of timing for maximum advantage. He debunks popular myths and misconceptions about investing and shows you how to avoid mistakes in order to invest wisely. An extensive glossary, definitions and examples, and lists of "dos" and "don'ts" will make this book a handyresource for the novice, as well as for seasoned investors looking to take their game to the next level.

Ben Branch is Professor of Finance at the University of Massachusetts, Amherst.