Part 1: Welcome to Planet Confusia
1. What makes understanding the investment landscape so difficult?
2. Why do stock prices go up and down? Why are investors most pessimistic at market bottoms and optimistic at market tops?
3. Are rising markets always good and falling markets bad?
4. What is the relationship between financial markets and the economy?
5. Should my investments be based on a particular prediction of the future course of the economy?
6. Why do all these different types of financial companies want my business? Do they really care about my best interests?
Part 2: Verbs are More Important than Nouns
7. Why is an investment process better than an investment plan?
8. What is the difference between investing and gambling?
9. What is the problem with treating my investments like a collection?
10. What are the characteristics of a thorough investment process?
Part 3: Risk is not a Ruler
11. What is the relationship between risk, reward, uncertainty and volatility?
12. What are the different types of risks one should consider when making investment decisions?
13. How should I determine an appropriate level of risk for my personal portfolio?
Part 4: Your Gut Feeling is Wrong: The Ten Spectrums of Cognitive Investing
14. How do the various psychological biases lead to inferior investment decisions? What should one do to avoid the pitfalls from these psychological biases?
15. Spectrum #1: Simple vs. Complex
16. Spectrum #2: The Trees vs. The Forest
17. Spectrum #3: Today vs. Tomorrow
18. Spectrum #4: Stories vs. Concepts
19. Spectrum #5: Pictures vs. Numbers
20. Spectrum #6: Light vs. Dark
21. Spectrum #7: The Middle vs. The Edge
22. Spectrum #8: Me vs. Everyone Else
23. Spectrum #9: Static vs. Dynamic
24. Spectrum #10: Craftsmanship vs. Systematic Rules
Part 5: Portfolio Design
25. Why should investment decisions be framed as asset allocation, security selection, or market timing decisions? Which is most important?
26. Why is diversification important?
27. How important is correlation in the asset allocation process?
28. How should I decide what my asset allocation should be?
29. Should risk be controlled through asset allocation or security selection?
30. How should I pick securities? How concerned should I be about costs? Taxes?
31. Should I own individual bonds or bond funds?
32. Should I own individual stocks or stock funds?
33. Should I own actively-managed funds or index funds?
34. How should I choose index funds?
35. Why do individual investors make poor market timing decisions and how can I avoid making similar mistakes?
36. Should I use stop-loss orders to control risk?
37. How does dollar cost averaging work?
38. Why rebalance?
Part 6: Template Portfolios for the Cognitive Investor
39. How about furnishing some sample portfolios?
40. What is so great about this portfolio management process?
41. How should these portfolios be managed over time?
42. How will these portfolios behave in the next several years? What should I expect?
43. How can I convert my existing portfolio to a cognitive investor’s portfolio?