Chapter 9: Know Thyself
One of the most important things that any investor can do is identify their risk tolerance. You should understand how recent market activity may influence the way you feel toward the market, and consequently, your risk tolerance at any given time.
I have followed Jason Zweig for many years and have always found him to be a voice of reason. Your Money and Your Brain by Jason Zweig, Simon & Shuster, should be required reading for all investors. The following article appeared in the Wall Street Journal in February 2012. If you do not read Jason’s book, at least read this article.
The Intelligent Investor: This Is Your Brain on a Hot Streak by Jason Zweig
Past returns are no guarantee of future success. Just like smokers ignoring the Surgeon General’s warning on the side of cigarette packs, investors over-look the most obvious caution about the stock market at their peril.
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