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Blind Faith

Book Description

The risk of investing in the stock market has increased remarkably over the last decade. In this period we've seen tremendous volatility in stock prices, a market bubble and its subsequent pop, a parade of corporate scandals, the demise of a leading accounting firm and proven deception by many so-called investment analysts employed by major brokerage firms. In addition, the realities of ever-increasing geopolitical risks contribute to an uncertain economic future. Blind Faith offers a cleverly simple yet revolutionary approach for managing investments in this perpetual high-risk environment. Corporate America and the investment industry have little to gain and lots to lose when investors decide to stop playing the traditional game that can -and has - destroyed trillions of dollars of individual wealth overnight. Readers will be equipped with both the strategy and the tools for success in virtually any economic environment while ending their participation in a system that has taken full advantage of their blind faith and misplaced trust.

Table of Contents

  1. COVER PAGE
  2. TITLE PAGE
  3. COPYRIGHT PAGE
  4. PREFACE: THE JOURNEY
    1. ACKNOWLEDGMENTS
  5. INTRODUCTION: BEYOND BLIND FAITH— THERE IS CLARITY
    1. THE FOUR MAIN MESSAGES
    2. THE AVERAGE INVESTOR SHOULD STEER CLEAR OF STOCKS—HERE’S WHY
    3. STRATEGIES FOR DEALING WITH UNCERTAINTY
    4. MAXIMIZING RETURNS WHILE MINIMIZING RISK
    5. EXTREMIST VIEW OR LOGICAL CONCLUSION?
  6. PART I: THE AVERAGE PERSON SHOULD STEER CLEAR OF STOCKS—HERE’S WHY
    1. CHAPTER ONE: THE STOCK MARKET CAN WE WIN AT THIS GAME?
      1. INDIVIDUAL INVESTOR PERFORMANCE VS. THE MARKET
      2. PROFESSIONAL INVESTMENT MANAGERS VS. THE MARKET
      3. A HISTORICAL PERSPECTIVE ON THE MARKET
      4. INFORMATION, TRADING COSTS, AND TURNOVER
    2. CHAPTER TWO: FAITH IN OURSELVES THE IRRATIONAL BEHAVIOR OF INVESTORS
      1. THE BEHAVIOR OF INDIVIDUAL INVESTORS
      2. THE MADNESS OF CROWDS
      3. INVESTING OR GAMBLING?
      4. FACING THE REALITY
    3. CHAPTER THREE: FAITH IN CORPORATIONS TRICKS OF THE TRADE
      1. CORPORATE EARNINGS DRIVE STOCK PRICES
      2. CREATIVE WAYS IN WHICH MANAGEMENT MANIPULATES EARNINGS
      3. ALICE-IN-WONDERLAND ACCOUNTING
      4. PUBLIC RELATIONS FOR INVESTORS
      5. NEW ISSUES OF COMMON STOCK
    4. CHAPTER FOUR: FAITH IN PROFESSIONAL ADVICE CONFLICTS OF INTEREST
      1. EVALUATING THE CORPORATION
      2. . . . AND THEN IT ALL FELL APART
    5. CHAPTER FIVE: THE REAL WINNERS OF THE STOCK MARKET GAME
      1. THE EXECUTIVE BENEFICIARY
      2. THE CORPORATE BENEFICIARY
      3. THE INVESTMENT INDUSTRY BENEFICIARY
      4. STEERING CLEAR OF THE INSANITY
  7. PART II: STRATEGIES FOR DEALING WITH UNCERTAINTY
    1. CHAPTER SIX: REDEFINING RISK MANAGEMENT
      1. CONVENTIONALLY DEFINING RISK
    2. CHAPTER SEVEN: MAINTAINING CONTROL OF OUR FINANCIAL FUTURE
      1. THE PROTECTED INVESTOR
  8. PART III: SMARTER AND SAFER INVESTMENTS
    1. CHAPTER EIGHT: THE MATCHING GAME INVESTING IN THE INDEXES
      1. BEATING THE MARKET AT ANY COST
      2. BOGLEHEADS—THE ARGUMENT FOR INDEXING
      3. INVESTMENT ADVISERS—THE ARGUMENT AGAINST INDEXING
      4. SAFEGUARDING FINANCIAL ASSETS AGAINST LOSS—THE CRITICAL ISSUE
    2. CHAPTER NINE: THE PROTECTED INVESTOR SMARTER, SAFER WAYS TO INVEST
      1. TOOLS FOR TRANSFERRING RISK
      2. HEDGING
      3. MARKET-LINKED INVESTMENTS
      4. EQUITY-LINKED NOTES
      5. INSURANCE COMPANIES—EXPERTS IN EVALUATING RISK
      6. BE WARY OF SOME PRINCIPAL-PROTECTED INVESTMENTS
      7. WHY HAVEN’T I HEARD OF THESE BEFORE?
      8. GETTING THE HELP YOU NEED
    3. CHAPTER TEN: INVESTING FOR RETIREMENT
      1. WE’RE GETTING OLDER, BUT ARE WE GETTING WISER?
      2. ALLOCATING RETIREMENT SAVINGS
      3. AN ONGOING PHILOSOPHY
    4. CHAPTER ELEVEN: REFORMING THE SYSTEM
      1. OVERHAUL!
      2. CORPORATIONS AND THEIR EXECUTIVES
      3. ACCOUNTANTS AND REGULATORS
      4. THE BROKERAGE INDUSTRY
      5. THE INDIVIDUAL INVESTOR
  9. APPENDIX A: USING OPTIONS TO REDUCE RISK
    1. UNDERSTANDING PUTS AND CALLS
  10. APPENDIX B: CREDIT RATINGS
  11. Notes
    1. CHAPTER 1—THE STOCK MARKET: CAN WE WIN AT THIS GAME?
    2. CHAPTER 2—FAITH IN OURSELVES: THE IRRATIONAL BEHAVIOR OF INVESTORS
    3. CHAPTER 3—FAITH IN CORPORATIONS: TRICKS OF THE TRADE
    4. CHAPTER 4—FAITH IN PROFESSIONAL ADVICE: CONFLICTS OF INTEREST
    5. CHAPTER 5—THE REAL WINNERS OF THE STOCK MARKET GAME
    6. CHAPTER 6—RISK MANAGEMENT
    7. CHAPTER 7—MAINTAINING CONTROL OF OUR FINANCIAL FUTURE
    8. CHAPTER 8—THE MATCHING GAME: INVESTING IN THE INDEXES
    9. CHAPTER 9—THE PROTECTED INVESTOR: SMARTER, SAFER WAYS TO INVEST
    10. CHAPTER 10—INVESTING FOR RETIREMENT
    11. CHAPTER 11—REFORMING THE SYSTEM
    12. APPENDIX A—USING OPTIONS TO REDUCE RISK
    13. APPENDIX B: CREDIT RATINGS
  12. GLOSSARY
  13. INDEX
  14. ABOUT THE AUTHOR