Investment Discipline Can Overcome Emotional Traps And Secure Long-Term Investing Success
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October 2, 2012 (www.investorideas.com newswire) With ongoing economic and market uncertainty due to the U.S. presidential election, year-end fiscal cliff and future of the European Union and its members, the new book Investment Discipline: Making Errors Is OK, Repeating Errors Is Not OK. (ISBN: 978-1-4525-5277-4, $15.99) provides a timely primer on best practices in investing. Author Reto Gallati, former chief risk officer and head of investments at Nuveen Investments, makes a compelling case for the value of investment discipline, notably developing an investment plan based on thoughtful objectives and sticking to it for the long haul.
Easier said than done, of course. So Gallati provides retail investors with not only with a litany of investment do's but spends at least as much time on a flipside list of don'ts. Investment Discipline:
organizes investing rules into 18 lessons such as "do not rush" and "become a contrarian"
explores common mistakes investors make when they don't follow the rules
offers steps to avoid these traps
Under "Watch Your Investments," for example, typical mistakes include not cashing out and locking in your profit, not cutting your losses, and putting too much faith in recent performance. Disciplined investors can dodge these dangers by taking such actions as regularly monitoring their investments, rebalancing periodically, and routinely adding investment funds to benefit from dollar cost averaging.
"Too often, emotions cloud judgment, prompting investors to buy or sell for the wrong reasons, at the wrong time, such as a TV pundit saying Company X will be the next Apple," Gallati says. "A disciplined approach builds a process around your portfolio. It strips out the hot tips, crowd mentality and other pitfalls to keep the focus on the merits of each investment over time, whether an index fund or stock."
"While this approach won't prevent investors from making errors, it will help minimize the impact and stop investors from repeating mistakes," says Gallati.
Gallati developed his rules for disciplined investing based on his extensive professional and personal investing experience as well as drawing on a wide range of studies, books and other sources. In addition to Nuveen, Gallati has held senior positions at several Wall Street firms, including deputy chief risk officer at Putnam Investments and deputy CIO and senior portfolio manager at Goldman Sachs Bank in Zurich . Gallati, who holds a PhD in mathematics and finance from the University of Zurich , now manages his own firm, Raetia Investments, LLC. He was a professor at the Sloan School of Management at the Massachusetts Institute of Technology in Boston and the Booth School of Business at the University of Chicago and serves as special advisor and board member to several investment firms.
To request a review copy of the book, or to arrange an interview, contact Gardi Wilks at firstname.lastname@example.org or 708-434-5006.
Investment Discipline: Making Errors Is OK, Repeating Errors Is Not OK
Reto R. Gallati September 2012, $15.99 ISBN: 978-1-4525-5277-4
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