A new (March 2025) book by Barry Ritholtz, How NOT to Invest, is summarized by the author in his blog post 10 Biggest Ideas in “How NOT to Invest”. Slightly abridged:

Bad Ideas:

1. Poor Advice: Why is there so much bad advice? The short answer is that we give too much credit to gurus who self-confidently predict the future despite overwhelming evidence that they can’t. We believe successful people in one sphere can easily transfer their skills to another – most of the time, they can’t. ...

2. Media Madness: Do we really need 24/7 financial advice for our investments we won’t draw on for decades? Why are we constantly prodded to take action now! when the best course for our long-term financial health is to do nothing? ...

3. Sophistry: The Study of Bad Ideas: Investing is really the study of human decision-making. It is about the art of using imperfect information to make probabilistic assessments about an inherently unknowable future. This practice requires humility and the admission of how little we know about today and essentially nothing about tomorrow. Investing is simple but hard, and therein lies our challenge.

Bad Numbers:

4. Economic Innumeracy: Some individuals experience math anxiety, but it only takes a bit of insight to navigate the many ways numbers can mislead us. It boils down to context. We are too often swayed by recent events. We overlook what is invisible yet significant. We struggle to grasp compounding – it’s not instinctive. We evolved in an arithmetic world, so we are unprepared for the exponential math of finance.

5. Market Mayhem: As investors, we often rely on rules of thumb that fail us. We don’t fully understand the importance of long-term societal trends. ...

6. Stock Shocks: Academic research and data overwhelmingly reveal that stock selection and market timing do not work. ...

Bad Behavior:

7. Avoidable Mistakes: Everyone makes investing mistakes, and the wealthy and ultra-wealthy make even bigger ones. We don’t understand the relationship between risk and reward; we fail to see the benefits of diversification. Our unforced errors haunt our returns.

8. Emotional Decision-Making: We make spontaneous decisions for reasons unrelated to our portfolios. We mix politics with investing. We behave emotionally. We focus on outliers while ignoring the mundane. We exist in a happy little bubble of self-delusion, which is only popped in times of panic.

9. Cognitive Deficits: You’re human – unfortunately, that hurts your portfolio. Our brains evolved to keep us alive on the savannah, not to make risk/reward decisions in the capital markets. We are not particularly good at metacognition—the self-evaluation of our own skills. We can be misled by individuals whose skills in one area do not transfer to another. We prefer narratives over data. When facts contradict our beliefs, we tend to ignore those facts and reinforce our ideology. Our brains simply weren’t designed for this.

Good Advice:

10. This is the best advice I can offer:

A. Avoid mistakes (fewer unforced errors, be less stupid).

B. Recognize your advantages (and take advantage of them).

C. Create a financial plan (then stick to it). If you need help, find someone who is a fiduciary to work with.

D. Index (mostly). Own a broad set of low-cost equity indices for the best long-term results.

E Own bonds for income and to offset stock volatility. Primarily Treasuries, investment-grade corporates, munis, and TIPs.

F. Be tax-aware. Consider direct indexing to reduce capital gains and reduce concentrated positions.

G. Use a regret minimization strategy when sitting on outsized single position gains.

H. Be skeptical of all but the best alts (VC/PE/HF/PC). If you have access to the top decile, take advantage of it. Otherwise, exercise caution.

I. Spend your money intelligently: Buy time, experiences, and joy. Ignore the scolds.

J. Fail better. Understand what is and is NOT in your control.

K. Get rich: Here are the classic strategies to get rich in the markets, including how difficult each is and their likelihood of success.

Thoughtful, excellent advice! — especially the metacognitive #3 and #9 comments, which apply throughout life ...

_{(cf Money Wisdom (2001-05-20), Bubble Busters (2002-02-06), Harry Browne Rules of Financial Safety (2019-12-24), Shiller Price Earnings Ratio (2021-03-29), Bogleheads (2024-01-28), Four Pillars of Investing (2024-04-19), ...) - ^z - 2025-04-03}