The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails

Investor Laureate

If we know the past, and have a sense of the future—and we do—it will be a great travesty if nothing meaningful is done to address the nation’s financial literacy crisis before the next financial crisis. If people can be taught how to think and frame financial and investment issues they have a better chance of productively navigating the financial market. They have a better chance of not falling for investment scams. They have a better chance of making risk-based financial decisions that will protect them from the inevitable booms and busts.

To protect investors, Washington and Wall Street must work together to develop a nationwide program that talks to people—not at them—about the principles and processes of sound investing that are almost always absent from the mass-media driven dialogue about the stock market. Some critics will say that such an approach interferes with the natural function of the market, or that many institutions and banks already have investor education programs, but those are narrow views. Besides, many of those programs are ineffective. Surely, the financial health of investors is as important as advising them of their caloric intakes, and dietary guidelines, as the U.S. Department of Agriculture does with its food pyramid. If financial literacy is increased, Big Brother can spend less energy protecting investors. This is the principle of teaching a man to fish so he will eat for his life, rather than giving him a fish that he will eat in ...