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How Not to Invest: The ideas, numbers, and behaviors that destroy wealth―and how to avoid them
This book was designed to reduce mistakes.
Your mistakes with money.
Tiny errors, epic fails and everything in between.
You can do thousands of things right, but make just a few of the errors we discuss, and you destroy much of your portfolio.
If you could learn how to avoid the unforced errors investors make all the time, you would make your life so much richer and less stressful.
The counterintuitive truth is avoiding errors is much more important than scoring wins.
How Not To Invest shows you a few simple tools and models that will help you avoid the most common mistakes people make with their money. Learn these, and you are ahead of 98% of your peers.
Make fewer errors, end up with more money.
We all make mistakes. The goal with this book is to help you make fewer of them, and to have the mistakes you do make be less expensive.
Your mistakes with money.
Tiny errors, epic fails and everything in between.
You can do thousands of things right, but make just a few of the errors we discuss, and you destroy much of your portfolio.
If you could learn how to avoid the unforced errors investors make all the time, you would make your life so much richer and less stressful.
The counterintuitive truth is avoiding errors is much more important than scoring wins.
How Not To Invest shows you a few simple tools and models that will help you avoid the most common mistakes people make with their money. Learn these, and you are ahead of 98% of your peers.
Make fewer errors, end up with more money.
We all make mistakes. The goal with this book is to help you make fewer of them, and to have the mistakes you do make be less expensive.
496 pages, Hardcover
Published March 18, 2025
354 people are currently reading
1876 people want to read
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Displaying 1 - 30 of 47 reviews
July 15, 2025
This book is mostly for ordinary people with some knowledge of investment. It's a fun read, but drags a bit.
Here is the gist:
1. No one can predict the future
2. Unless you are a Warren Buffet, forget about stock picking and market timing, stick to low cost index funds, passive investing, and buy and hold
3. Market ups and downs are inevitable; stay calm; the bear market is where most money is made; by the time news reaches your ears, it is already in the stock price; buy low and sell high is harder than you think
4. Curate your asset allocation according to your risk tolerance level
5. If you want (you probably don’t need) a financial advisor, stick to the fiduciary kind; always ask what they are selling to you; a high cost financial advisor is almost certainly a waste of money
6. If you are a junkie who gets dopamine high from trading, carve 2-3% of your liquid assets and put it into a different account and trade with delight or peril.
7. If you are really fancy, try Direct Indexing
In short, make fewer mistakes than the rest of the investors and you’ll be fine.
PS: The secular market and the cyclical market are two different things. Here is a picture from the author's website:
https://ritholtz.com/wp-content/uploa...
Here is the gist:
1. No one can predict the future
2. Unless you are a Warren Buffet, forget about stock picking and market timing, stick to low cost index funds, passive investing, and buy and hold
3. Market ups and downs are inevitable; stay calm; the bear market is where most money is made; by the time news reaches your ears, it is already in the stock price; buy low and sell high is harder than you think
4. Curate your asset allocation according to your risk tolerance level
5. If you want (you probably don’t need) a financial advisor, stick to the fiduciary kind; always ask what they are selling to you; a high cost financial advisor is almost certainly a waste of money
6. If you are a junkie who gets dopamine high from trading, carve 2-3% of your liquid assets and put it into a different account and trade with delight or peril.
7. If you are really fancy, try Direct Indexing
In short, make fewer mistakes than the rest of the investors and you’ll be fine.
PS: The secular market and the cyclical market are two different things. Here is a picture from the author's website:
https://ritholtz.com/wp-content/uploa...
April 7, 2025
This will surely be hailed as one of the best All Time Great Investing/ Personal Finance books! Not everyday you read over 440 pages, cover to cover without skipping a dot and finish it without being bored in less than a week! Just too good
June 8, 2025
Good investment philosophy. I followed Barry Ritholtz closely for several years before most of his posts went behind a paywall, so much of this was already familiar to me.
Invest for the long term, keep it simple, use index funds, don't panic, be skeptical of advisors, pundits and salesmen, know your own fears and biases and tame them with long term planning, don't try to time the market, let compounding work for you, don't be greedy or impatient.
Learn how to avoid mistakes being too clever and thinking you can outsmart the market. Average equity performance over the long term will be quite sufficient, while aiming for more will probably fail.
Invest for the long term, keep it simple, use index funds, don't panic, be skeptical of advisors, pundits and salesmen, know your own fears and biases and tame them with long term planning, don't try to time the market, let compounding work for you, don't be greedy or impatient.
Learn how to avoid mistakes being too clever and thinking you can outsmart the market. Average equity performance over the long term will be quite sufficient, while aiming for more will probably fail.
June 30, 2025
This book is incoherent and far longer than it needed to be. It is filled with interesting stories. (Ever hear of the billionaire family that was invested heavily in Enron… and then with Bernie Madoff… and then with Sam Bankman-Fried’s FTX? Damn.) It also has some sage-sounding advice, much of which is good, but you’d have to already know which advice was good to pick the wheat from the chaff. It has so many contradictions, including in its advice, that on the whole it’s a mess.
This is the kind of accurate but useless Yoda wisdom that fills this book.
I came in with some respect for Ritholtz—while I haven’t read him for years, a long time ago I was a semi-regular reader of his blog. And I do think he’s better than most in the financial sector, with more honesty and good advice. The problem is that his core advice is one or two sentences long—e.g., “a portfolio of passive low-cost indexes should make up the core of your holdings” (p. 254)—and yet he wanted to write a book. We already had people with much better short summaries of advice turn them into a much better full-length books (The Index Card: Why Personal Finance Doesn't Have to Be Complicated, The Bogleheads' Guide to Investing), and that was what 97% of people needed.
With substantial editing, this book could have been mildly useful for the 3% of people who don’t want to follow that advice and think they can get rich trading on their own (or investing in actively managed funds or hedge funds). Ritzholtz shows you why that’s a bad idea. But he could have done that in a much shorter book, and therefore much of this book is aimed at people who are trading anyway. The problem is, he doesn’t really have good advice to give them. He gives a number of good-sounding ideas, but then contradicts himself.
Major mistakes and inconsistencies:
“Don’t try to time the markets”, he announced on page 337. He describes this as “a fool’s errand.” Great. But literally the next paragraph is urging you to try to find the bottom of the market. Is this not the definition of market timing?
Ritholtz repeats over and over that “nobody knows anything” (which he attributes to William Goldman; e.g., p. 113), even calling it his favorite phrase. He discusses how even experts are terrible at predicting. (He cites the de rigueur Philip Tetlock research, p. 201, but while he notes that Tetlock finds what makes successful forecasters successful, he doesn’t discuss it at all…) But then on p. 236 he recounts how he “should have deferred to the pro” when forecasting the success of Robinhood.
He endorses the strategy to “always know where you’re getting out before you even get in” (p. 246), shortly after mocking traders and chastising himself for doing that exact thing with Apple (p. 235).
He says that “the investor who refuses to sell because they don’t want to take the loss has not yet realized that the loss of capital has already occurred” (p. 246), which sounds reasonable until you realize he was just strongly advocating to buy and hold earlier, with numerous examples of even the best performing stocks tanking temporarily before giving amazing returns. And he later warns against panic selling (pp. 306–308), which is again reasonable, but what counts as “panic selling” vs. “taking the loss that already exists on bad assets”? Ritholtz got out of stocks in 2008—how was that not panic selling? (I was still holding my equities then. He did better than I did, but even he admits luck was involved.)
He mocks Fortune magazine for lauding BlackBerry in 2007 even though “around the time of that story, RIMM’s sales were $20 billion; within five years they fell 90%” (p. 72). Um, no. The chart he includes right below this shows that RIMM’s sales were $20 billion in 2011, a 400% increase from where they were in 2007 when that story was written. In 2012, five years after that story, their profits were still barely off this all-time high.
He lauds the clear critical thinking of famous climate change conspiracist Michael Crichton (pp. 80–81).
He thinks the inflation of 2021–2022 was demand driven rather than supply driven (p. 144).
He gets something as simple as tax rates wrong. He says “the long-term federal tax rate on capital gains is 24%; short-term rates are 30%” (p. 222). Long-term rates are 0, 15%, or 20% depending on your income. None of those are 24%, and to reach 20% in 2024 (when he was writing this) you’d have needed a taxable income over $519k (single) or $584k (MFJ). Short-term capital gains are taxed as regular income, and there is no 30% bracket. In 2024, the closest one was 32%, but someone paying 20% on long-term gains would have been in the 35% or 37% brackets.
Ritzholtz notes that those fund managers who outperformed their benchmarks last year are not among those who outperform this year. Active fund managers would do much better by selling assets randomly than what they are doing (pp. 219–221). Giants in investing, like Warren Buffet, have made very wrong calls (p. 141). The “world’s greatest stock trader” does only about as well as someone buying and holding the S&P 500 (pp. 222–223). But then he gives the story of the Harvard Management Corporation, which he says totally screwed things up by not paying seven times what their nearest competitor did to “a management team consistently outperform[ing] its benchmarks” (p. 290). So now somehow those vastly inflated Wall Street salaries based on recent performance that was mostly luck are worth it?
It’s particularly funny that his chapter on Harvard’s endowment—where he criticizes them for making a decision that was obviously bad only in retrospect—is directly followed by a chapter that opens with a discussion of hindsight bias. And notes that “successful results in investing could very well be a mere coincidence—a result without any underlying causation on the manager’s part… what looks like personal greatness is very often not” (p. 292). Like bro, did you read your own book?
When he describes everything we’ve survived, from the Ice Age to the Middle Ages to the Great Depression (p. 319), with the conclusion that we should stay invested in equities… there have been plenty of times in history when many people have not been fine, including all those times he listed. Countries collapse. Currencies collapse. Millions die. The Dark/Middle Ages (he confusingly lists them separately) were a thousand-year collapse of Europe’s intellectual, economic, and military power. If that’s the kind of thing you can ride out, you’re a vampire with a longer investing timeline than I have.
Ritholtz criticizes Suze Orman’s advice about getting rich by not buying a cup of coffee a day, and while he makes some good points, he’s wrong on two fronts. First, the point is that we can develop expensive little habits that we don’t think much about because each individual transaction is cheap. These can add up. Second, his calculation is terribly wrong (although so is Orman’s). Orman claims 12% returns, which is nuts, but Ritholtz gets it just as wrong from the other direction. He says, “historically, equities return 8% annually” (p. 430), and then claims this is nominal rather than real and should be adjusted down by 2–3%. This is already wrong: the S&P 500 has historically returned about 7% real (CAGR of 7.09% 1871–2024, 7.65% 1920–2024, 6.51% 1960–2024). I can’t find any broad index that’s historically returned 8% nominal over long periods. Second, even granting his lowest return of 5%, the calculation returns $149,000 over 40 years, but he claims it returns $90,000. To get down to $92,000, you have to assume a rate of only 3%. So apparently Ritzholtz took 8% and then subtracted both 2% and 3%, rather than one or the other, which is insanity. He concludes by saying that $90,000 in 2025 would “maybe” buy “an okay car” (p. 430), which shows how out of touch he is with normal people; this is nearly twice the median new car sales price. For the record, the real amount you could make if you put $100/month in the S&P 500 for 40 years and got historically average returns of 7% real is $249,000. Not the million Orman claims, but definitely not just $90,000 as Ritholtz claims.
Now, I appreciate that Ritzholtz calls out much bigger issues than spending money on lattes, including the prices of housing, healthcare, and education, as well as stagnation of wages (p. 431). However, those are all things that he puts in the category of not in your control (p. 437) and tells you not to focus on them. (Of course, if we act collectively, these are somewhat under our control… but that would be getting into politics, and he refuses to touch that.)
Ritholtz thinks of Bitcoin “like a huge tech company” (p. 407) and “doesn’t know” if cryptocurrency should be viewed as “currencies, commodities, or a separate speculative asset class” (p. 421). Bitcoin is not issued by a state and is not valid for paying the taxes of a state, so it’s not a fiat currency. It’s not something a consumer can use for anything (unlike oil, corn, coffee, or gold) so it’s not a commodity. There is nothing behind crypto other than scarcity and perceived value. We’ve seen such things collapse before, such as the NFT craze. Crypto does have one use: paying anonymously in criminal transactions. If that’s the kind of thing you want to speculate on, sure, go for it.
Minor nits:
Ritzholtz tries to make the flow of the book coherent by introducing a lead-in to the next chapter at the end of every previous chapter, but it’s an annoying rhetorical device that does nothing to effectively draw the whole book together. The book is rambling. If you have to try a rhetorical device to draw chapters together, that’s a sign that they’re not naturally doing it themselves.
OMG, how many times can he mention the Dunning–Kruger effect and say “more on that later” before actually giving us the more? A half dozen times he does this, including as late as page 328. Spoiler, he doesn’t describe Dunning–Kruger until page 354, and even then does a mediocre job of it.
The Rule of 72 is a useful approximation, but on p. 147 he quotes a result to three significant figures (he claims a doubling will take 7.03 years when it will actually take 7.12 years, and the rate he uses is around peak accuracy for the Rule of 72).
On page 284 he says that high-frequency trading “had been around since 1983” but that in 1987 “dark pools and high-frequency trading were the stuff of science fiction”.
He thinks “plural” means a sample size of 1 (p. 159).
Homo sapiens did not appear 2 million years ago (as claimed on page 305); this is too high by an entire order of magnitude. Is he talking about the homo genus?
Bacteria and fungi are entire kingdoms, not individual species (p. 306).
Aristotle was not Socrates’s student (p. 357). The most famous teacher–student chain in history is Socrates–Plato–Aristotle–Alexander the Great. Aristotle was born 15 years after Socrates died, which should be easy to remember given that Plato was famously young when Socrates died as an old man.
Markets are more or less efficient, except when they’re not. [p. 328]
This is the kind of accurate but useless Yoda wisdom that fills this book.
I came in with some respect for Ritholtz—while I haven’t read him for years, a long time ago I was a semi-regular reader of his blog. And I do think he’s better than most in the financial sector, with more honesty and good advice. The problem is that his core advice is one or two sentences long—e.g., “a portfolio of passive low-cost indexes should make up the core of your holdings” (p. 254)—and yet he wanted to write a book. We already had people with much better short summaries of advice turn them into a much better full-length books (The Index Card: Why Personal Finance Doesn't Have to Be Complicated, The Bogleheads' Guide to Investing), and that was what 97% of people needed.
With substantial editing, this book could have been mildly useful for the 3% of people who don’t want to follow that advice and think they can get rich trading on their own (or investing in actively managed funds or hedge funds). Ritzholtz shows you why that’s a bad idea. But he could have done that in a much shorter book, and therefore much of this book is aimed at people who are trading anyway. The problem is, he doesn’t really have good advice to give them. He gives a number of good-sounding ideas, but then contradicts himself.
Major mistakes and inconsistencies:
“Don’t try to time the markets”, he announced on page 337. He describes this as “a fool’s errand.” Great. But literally the next paragraph is urging you to try to find the bottom of the market. Is this not the definition of market timing?
Ritholtz repeats over and over that “nobody knows anything” (which he attributes to William Goldman; e.g., p. 113), even calling it his favorite phrase. He discusses how even experts are terrible at predicting. (He cites the de rigueur Philip Tetlock research, p. 201, but while he notes that Tetlock finds what makes successful forecasters successful, he doesn’t discuss it at all…) But then on p. 236 he recounts how he “should have deferred to the pro” when forecasting the success of Robinhood.
He endorses the strategy to “always know where you’re getting out before you even get in” (p. 246), shortly after mocking traders and chastising himself for doing that exact thing with Apple (p. 235).
He says that “the investor who refuses to sell because they don’t want to take the loss has not yet realized that the loss of capital has already occurred” (p. 246), which sounds reasonable until you realize he was just strongly advocating to buy and hold earlier, with numerous examples of even the best performing stocks tanking temporarily before giving amazing returns. And he later warns against panic selling (pp. 306–308), which is again reasonable, but what counts as “panic selling” vs. “taking the loss that already exists on bad assets”? Ritholtz got out of stocks in 2008—how was that not panic selling? (I was still holding my equities then. He did better than I did, but even he admits luck was involved.)
He mocks Fortune magazine for lauding BlackBerry in 2007 even though “around the time of that story, RIMM’s sales were $20 billion; within five years they fell 90%” (p. 72). Um, no. The chart he includes right below this shows that RIMM’s sales were $20 billion in 2011, a 400% increase from where they were in 2007 when that story was written. In 2012, five years after that story, their profits were still barely off this all-time high.
He lauds the clear critical thinking of famous climate change conspiracist Michael Crichton (pp. 80–81).
He thinks the inflation of 2021–2022 was demand driven rather than supply driven (p. 144).
He gets something as simple as tax rates wrong. He says “the long-term federal tax rate on capital gains is 24%; short-term rates are 30%” (p. 222). Long-term rates are 0, 15%, or 20% depending on your income. None of those are 24%, and to reach 20% in 2024 (when he was writing this) you’d have needed a taxable income over $519k (single) or $584k (MFJ). Short-term capital gains are taxed as regular income, and there is no 30% bracket. In 2024, the closest one was 32%, but someone paying 20% on long-term gains would have been in the 35% or 37% brackets.
Ritzholtz notes that those fund managers who outperformed their benchmarks last year are not among those who outperform this year. Active fund managers would do much better by selling assets randomly than what they are doing (pp. 219–221). Giants in investing, like Warren Buffet, have made very wrong calls (p. 141). The “world’s greatest stock trader” does only about as well as someone buying and holding the S&P 500 (pp. 222–223). But then he gives the story of the Harvard Management Corporation, which he says totally screwed things up by not paying seven times what their nearest competitor did to “a management team consistently outperform[ing] its benchmarks” (p. 290). So now somehow those vastly inflated Wall Street salaries based on recent performance that was mostly luck are worth it?
It’s particularly funny that his chapter on Harvard’s endowment—where he criticizes them for making a decision that was obviously bad only in retrospect—is directly followed by a chapter that opens with a discussion of hindsight bias. And notes that “successful results in investing could very well be a mere coincidence—a result without any underlying causation on the manager’s part… what looks like personal greatness is very often not” (p. 292). Like bro, did you read your own book?
When he describes everything we’ve survived, from the Ice Age to the Middle Ages to the Great Depression (p. 319), with the conclusion that we should stay invested in equities… there have been plenty of times in history when many people have not been fine, including all those times he listed. Countries collapse. Currencies collapse. Millions die. The Dark/Middle Ages (he confusingly lists them separately) were a thousand-year collapse of Europe’s intellectual, economic, and military power. If that’s the kind of thing you can ride out, you’re a vampire with a longer investing timeline than I have.
Ritholtz criticizes Suze Orman’s advice about getting rich by not buying a cup of coffee a day, and while he makes some good points, he’s wrong on two fronts. First, the point is that we can develop expensive little habits that we don’t think much about because each individual transaction is cheap. These can add up. Second, his calculation is terribly wrong (although so is Orman’s). Orman claims 12% returns, which is nuts, but Ritholtz gets it just as wrong from the other direction. He says, “historically, equities return 8% annually” (p. 430), and then claims this is nominal rather than real and should be adjusted down by 2–3%. This is already wrong: the S&P 500 has historically returned about 7% real (CAGR of 7.09% 1871–2024, 7.65% 1920–2024, 6.51% 1960–2024). I can’t find any broad index that’s historically returned 8% nominal over long periods. Second, even granting his lowest return of 5%, the calculation returns $149,000 over 40 years, but he claims it returns $90,000. To get down to $92,000, you have to assume a rate of only 3%. So apparently Ritzholtz took 8% and then subtracted both 2% and 3%, rather than one or the other, which is insanity. He concludes by saying that $90,000 in 2025 would “maybe” buy “an okay car” (p. 430), which shows how out of touch he is with normal people; this is nearly twice the median new car sales price. For the record, the real amount you could make if you put $100/month in the S&P 500 for 40 years and got historically average returns of 7% real is $249,000. Not the million Orman claims, but definitely not just $90,000 as Ritholtz claims.
Now, I appreciate that Ritzholtz calls out much bigger issues than spending money on lattes, including the prices of housing, healthcare, and education, as well as stagnation of wages (p. 431). However, those are all things that he puts in the category of not in your control (p. 437) and tells you not to focus on them. (Of course, if we act collectively, these are somewhat under our control… but that would be getting into politics, and he refuses to touch that.)
Ritholtz thinks of Bitcoin “like a huge tech company” (p. 407) and “doesn’t know” if cryptocurrency should be viewed as “currencies, commodities, or a separate speculative asset class” (p. 421). Bitcoin is not issued by a state and is not valid for paying the taxes of a state, so it’s not a fiat currency. It’s not something a consumer can use for anything (unlike oil, corn, coffee, or gold) so it’s not a commodity. There is nothing behind crypto other than scarcity and perceived value. We’ve seen such things collapse before, such as the NFT craze. Crypto does have one use: paying anonymously in criminal transactions. If that’s the kind of thing you want to speculate on, sure, go for it.
Minor nits:
Ritzholtz tries to make the flow of the book coherent by introducing a lead-in to the next chapter at the end of every previous chapter, but it’s an annoying rhetorical device that does nothing to effectively draw the whole book together. The book is rambling. If you have to try a rhetorical device to draw chapters together, that’s a sign that they’re not naturally doing it themselves.
OMG, how many times can he mention the Dunning–Kruger effect and say “more on that later” before actually giving us the more? A half dozen times he does this, including as late as page 328. Spoiler, he doesn’t describe Dunning–Kruger until page 354, and even then does a mediocre job of it.
The Rule of 72 is a useful approximation, but on p. 147 he quotes a result to three significant figures (he claims a doubling will take 7.03 years when it will actually take 7.12 years, and the rate he uses is around peak accuracy for the Rule of 72).
On page 284 he says that high-frequency trading “had been around since 1983” but that in 1987 “dark pools and high-frequency trading were the stuff of science fiction”.
He thinks “plural” means a sample size of 1 (p. 159).
Homo sapiens did not appear 2 million years ago (as claimed on page 305); this is too high by an entire order of magnitude. Is he talking about the homo genus?
Bacteria and fungi are entire kingdoms, not individual species (p. 306).
Aristotle was not Socrates’s student (p. 357). The most famous teacher–student chain in history is Socrates–Plato–Aristotle–Alexander the Great. Aristotle was born 15 years after Socrates died, which should be easy to remember given that Plato was famously young when Socrates died as an old man.
April 11, 2025
I read this book on the advice of Paul Krugman on the Ezra Klein podcast. I got it on Libby so luckily I didn't waste $40 on buying it. it is written terribly, filled with countless predictable anecdotes that are truly painful to read. I was expecting more from a Krugman recommendation!
August 20, 2025
Very good book on investing mistakes to avoid. When I first started the book, I was disappointed by a lack of eye-opening discoveries but soon realized much of the book pointed out more often overlooked common sense observations and self-rationalizations as well as negative traits and tendencies in my own behavior.
As I flipped through more pages, I found myself making mental notes about survivorship, denomination and hindsight biases, loss aversion, knowledge adjacency and resulting as well as making physical notes about the Belfer family, the Spock market, the cowboy account and the illusion of explanatory depth and knowledge adjacency.
The author also recants interesting stories and anecdotes as well as dropping quite a few memorable one-liners...
After finishing, it was apparent why this book comes so highly recommended and is a top seller!
As I flipped through more pages, I found myself making mental notes about survivorship, denomination and hindsight biases, loss aversion, knowledge adjacency and resulting as well as making physical notes about the Belfer family, the Spock market, the cowboy account and the illusion of explanatory depth and knowledge adjacency.
The author also recants interesting stories and anecdotes as well as dropping quite a few memorable one-liners...
After finishing, it was apparent why this book comes so highly recommended and is a top seller!
May 12, 2025
A candidate to be a classic.
It has short chapters (fast to chew) with inline references, which is more practical and easier to use. It's to the point and up to date with recent events. It has recommendations for A+ team to get your daily econ information/commentary. I read a few interesting/new/different stories for the same classical historical moments. However, it loses steam at mental models/behavioral economics part and feels like a repetition, that part requires more anecdotes. Be sure to read the ending to get the formula of the inversion after enduring a lot of not to do.
It has short chapters (fast to chew) with inline references, which is more practical and easier to use. It's to the point and up to date with recent events. It has recommendations for A+ team to get your daily econ information/commentary. I read a few interesting/new/different stories for the same classical historical moments. However, it loses steam at mental models/behavioral economics part and feels like a repetition, that part requires more anecdotes. Be sure to read the ending to get the formula of the inversion after enduring a lot of not to do.
May 23, 2025
This was surprisingly interesting. I had a really good time listening to this. The central thesis of no one can predict the future should be obvious but is always good to remember. This made me feel way more confident in what I'm doing and not worry about spending copious amounts of time learning about the stock market and specific stocks. I really recommend this for people like me who know next to nothing about investing.
July 22, 2025
Reads like a (too) large collection of individual stories of the many ways investments can go wrong. Ultimately, we are our own biggest enemy when it comes to creating a simple investment plan, and sticking to it. For most people, the largest probably of achieving financial success is to buy the entire market (using a low cost diversified index), hold it for decades, and enjoy your retirement.
June 29, 2025
A refreshingly different take on wealth-building, How Not to Invest flips the usual investing narrative. Instead of chasing alpha or timing the market, it offers a thoughtful guide to avoiding common pitfalls—what the author calls “unforced errors.”
This is not a book about picking winners, but about not being your own biggest risk. Insightful, pragmatic, and grounded in behavioral finance, it shows how avoiding mistakes can let the natural compounding power of markets do the heavy lifting.
A must-read for those who believe that discipline often beats brilliance.
This is not a book about picking winners, but about not being your own biggest risk. Insightful, pragmatic, and grounded in behavioral finance, it shows how avoiding mistakes can let the natural compounding power of markets do the heavy lifting.
A must-read for those who believe that discipline often beats brilliance.
August 3, 2025
I think simply one of the best books in financial literacy and investing. Takes a while to read through all the how not to invest sections, which has some dimes to remember, but wraps it up on smart ideas on how to invest. Basically keep it simple.
July 6, 2025
Ritholtz spends a lot of pages trying to get across two simple messages for investors: Nobody giving advice knows anything, and just avoid being stupid. Don't jump in and out of equities, sectors, asset classes, the market, but rely on the substantial power of compounding
The writing is kind of a shotgun approach, and there is a LOT of hyperbole. I suspect he has been repurposing a lot of old blogs and collating them into a cohesive narrative. That said, I felt like one area he did a good job of bringing home was the importance of understanding risk.
Returns are a function of risk: The greater return you seek, the more risk you must be willing to accept......To get better than average returns you must be willing to accept higher—sometimes much higher—levels of risk. This means that sometimes, you will receive lower returns or even losses. This is how investing works. The inverse is that if you want safety you must accept the inevitability of lower returns. Failing to understand the simple trade-off between risk and reward is one of the biggest errors most individual investors make.
While the emphasis is on what NOT to do, another useful piece of advice was for investors to focus more on process with the understanding that good outcomes follow good processes. It inspired me to go back and review my own personal processes, and clean up and formalize my notes around managing my own portfolio.
All-in-all, the reading is pretty breezy (maybe too much so) but he does provide a lot of good aphorisms:
It's remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. - Charlie Munger
When experts are wrong, it’s often because they’re experts on an earlier version of the world. - Paul Graham
The reason that ‘guru’ is such a popular word is because ‘charlatan’ is so hard to spell. - William Bernstein
The only function of economic forecasting is to make astrology look respectable. - John Kenneth Galbraith
All of humanity’s problems stem from man’s inability to sit quietly in a room alone. - Blaise Pascal
It’s almost as if your portfolio compounds over time regardless of the news....This is essentially a book on behavioral finance. The focus is not on the nuts and bolts of how to invest, but rather a concentration on people's behavior when they interact with money; how financial desire impacts our decision-making abilities; what risks we embrace, how we think about wealth.
[E]ven when events of great geopolitical significance occur, markets tend to shudder, then go back to whatever they were doing before.
The writing is kind of a shotgun approach, and there is a LOT of hyperbole. I suspect he has been repurposing a lot of old blogs and collating them into a cohesive narrative. That said, I felt like one area he did a good job of bringing home was the importance of understanding risk.
Returns are a function of risk: The greater return you seek, the more risk you must be willing to accept......To get better than average returns you must be willing to accept higher—sometimes much higher—levels of risk. This means that sometimes, you will receive lower returns or even losses. This is how investing works. The inverse is that if you want safety you must accept the inevitability of lower returns. Failing to understand the simple trade-off between risk and reward is one of the biggest errors most individual investors make.
While the emphasis is on what NOT to do, another useful piece of advice was for investors to focus more on process with the understanding that good outcomes follow good processes. It inspired me to go back and review my own personal processes, and clean up and formalize my notes around managing my own portfolio.
You should have an investment philosophy that can be expressed in a portfolio. This philosophy should include specific rules that you do not ignore. You want a portfolio with low costs, low turnover, low taxes and a long holding period.While most of the advice is sound (albeit also mostly obvious), I disagree with his argument in support of indexing. Indexing is a perfectly valid strategy, and pretty much locks a passive investor into the bounty of realizing market returns. It is the approach of choice for many, many investors. However, Ritholtz bases his argument for it on this paper by Bessembinder et al. [Hendrik Bessembinder, Te-Feng Chen, Goeun Choi and John Wei, “Do Global Stocks Outperform US Treasury Bills?” ssrn.com (July 9, 2019).] which shows that just 1.3% of the best performing stocks account for all of the equity market's excess returns above Treasury bills. Ritholtz argues that with such a low percentage of high performing stocks, you need to buy the entire market (through index funds) to ensure you are getting the winners. Sort of feels like he is falling prey to the Denominator Blindness he warns about earlier in the book. I would argue that you are just guaranteeing to yourself that you will get a huge bunch of low performing stocks. Their analysis included 17,310 US stocks. So the 1.3% referenced above includes 225 stocks. While no stock picker is going to pick only the high flyers, it seems pretty straight-forward to use the "what makes a good company" principles elaborated by the likes of Ben Graham, Phil Fisher, Warren Buffett, etc. to eliminate many, many of the bottom feeders in this 17,310 stock list. Why would you want those in your portfolio? In fact, at another point in the book, he makes this same case: "Managers should consider focusing less on being stock pickers, and more on being “stock-unpickers”—in other words, avoiding the dogs."
All-in-all, the reading is pretty breezy (maybe too much so) but he does provide a lot of good aphorisms:
It's remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. - Charlie Munger
When experts are wrong, it’s often because they’re experts on an earlier version of the world. - Paul Graham
The reason that ‘guru’ is such a popular word is because ‘charlatan’ is so hard to spell. - William Bernstein
The only function of economic forecasting is to make astrology look respectable. - John Kenneth Galbraith
All of humanity’s problems stem from man’s inability to sit quietly in a room alone. - Blaise Pascal
May 28, 2025
If you want the 90 second version, Barry Ritholtz is happy to give it to you. He describes giving the prudent investment advice that Bogleheads and 401K millionnaires live by. Buy the index, rebalance quarterly, stay consistent with dollar cost averaging, take advantage of your employers matches, and if you need to gamble, set aside some in your brokerage you are comfortable with losing.
In a conversational and swaggering pace, Riholitz builds the case for what we shouldn’t do. Mostly because it’s too boring and easy to aim the an S&P 500 beta match, and it doesn’t match our nature. So often we talk about our deficiencies as investors, our emotions, and the animal spirits we chase, but there is a hint of generosity when we are reminded this is just how we are built - survival, not investing. We are in this golden age of investing, tools and data at our fingertips that would not be possible even ten years ago (p.156).
It isn’t an exaggeration to say the first quarter of the book is really an exploration of William Goldman, a hollywood screenwriter’s infamous quote “nothing knows anything”. It happens to not only be sage advice, but useful for limiting our invest scope to what we can: contribute amounts, asset allocation types, tax harvesting, and a perspective/philosophy. We are all helpless to the charms and intellect of confident people. Even the renegade heroes like Michael Burry, as known from Michael Lewis’s “The Big Short”, has a remarkable unremarkable history with his prognostications. Reminders are needed, that it’s the con-men, that feast on our confidence. And the proverbial free lunch, chasing astronomical gains, and picking the winning stocks in a timely way, is the way to poverty. For every crypto bro success story are the multitude of losers with sore diamond hands.
Like Ritholtz, I have an ongoing interest to learn more about economics and personal finance, and the aim isn’t obscene wealth, but deep understanding of the markets that chart our collective human behavior. You have to wonder with the longview, if winning it big, on a cheap but lucrative trade is really an ultimate lost. There is so much more than an outcome - and understanding the trajectories of great firms like GE, Intel, Microsoft and NVIDIA are journeys worth exploring. We also are faced with all the disarming humility trading in markets where our knowledge and skill are limited, and we must make decisions against the unknowable.
Every so often we need a great book on markets - and as Ritholitz reminds us, this book will be just as relevant in twenty years as it is today. It’s a really wonderful book to spend your time with, and I think Ritholitz’s personality and years of observed cyclical changes shines through. It’s stories like this that we need for practical reasons, but ultimately for the purpose of leading a meaningful life. Wealth is about more than an account balance - it’s the world we build and people we carry with us.
In a conversational and swaggering pace, Riholitz builds the case for what we shouldn’t do. Mostly because it’s too boring and easy to aim the an S&P 500 beta match, and it doesn’t match our nature. So often we talk about our deficiencies as investors, our emotions, and the animal spirits we chase, but there is a hint of generosity when we are reminded this is just how we are built - survival, not investing. We are in this golden age of investing, tools and data at our fingertips that would not be possible even ten years ago (p.156).
It isn’t an exaggeration to say the first quarter of the book is really an exploration of William Goldman, a hollywood screenwriter’s infamous quote “nothing knows anything”. It happens to not only be sage advice, but useful for limiting our invest scope to what we can: contribute amounts, asset allocation types, tax harvesting, and a perspective/philosophy. We are all helpless to the charms and intellect of confident people. Even the renegade heroes like Michael Burry, as known from Michael Lewis’s “The Big Short”, has a remarkable unremarkable history with his prognostications. Reminders are needed, that it’s the con-men, that feast on our confidence. And the proverbial free lunch, chasing astronomical gains, and picking the winning stocks in a timely way, is the way to poverty. For every crypto bro success story are the multitude of losers with sore diamond hands.
Like Ritholtz, I have an ongoing interest to learn more about economics and personal finance, and the aim isn’t obscene wealth, but deep understanding of the markets that chart our collective human behavior. You have to wonder with the longview, if winning it big, on a cheap but lucrative trade is really an ultimate lost. There is so much more than an outcome - and understanding the trajectories of great firms like GE, Intel, Microsoft and NVIDIA are journeys worth exploring. We also are faced with all the disarming humility trading in markets where our knowledge and skill are limited, and we must make decisions against the unknowable.
Every so often we need a great book on markets - and as Ritholitz reminds us, this book will be just as relevant in twenty years as it is today. It’s a really wonderful book to spend your time with, and I think Ritholitz’s personality and years of observed cyclical changes shines through. It’s stories like this that we need for practical reasons, but ultimately for the purpose of leading a meaningful life. Wealth is about more than an account balance - it’s the world we build and people we carry with us.
June 22, 2025
The first sections of the book are focused on the many types of bad advice to avoid. This is covered exhaustively, and at some point you will probably have the thought that you get it, let's move on. But the survey will continue, and it's a good one but tbh I read it fairly quickly. I understand the message: no one knows anything, ignore pundits. The only real complaint I have about these sections is that financial terminology is thrown around very cavalierly, and if the book is purportedly aimed at the general, financially uneducated public, all of this terminology should either be explained or better yet jettisoned, because it is quite alienating to a new investor. We are not here to see how cool the author is or to learn how to sound cool ourselves. We know you're an expert. Maybe we should ignore you? But no, don't. These sections are at their best when they dive into the psychology of why we respond to these prognosticators the way we do, and this knowledge is valuable and actionable. So while you may want to read this part quickly, and you will encounter terms you don't understand (google it!), I'd still recommend reading it.
Page 45 contains the basic nuggets of Ritholtz's wisdom:
"1. A well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.
2. A broad asset allocation model that is Core & Satellite: Mostly passive indexes, plus whatever ornaments you might want on the tree. Rebalance every few years. Repeat forever.
3. Cut the useless, distracting noise in your media diet."
"Never forget the simple truism: All forecasting is marketing, plain and simple."
Through this onslaught of seemingly repetitive stories, a pattern of thinking emerges and one begins to understand that Ritholtz's thesis is just how pervasive this tendency towards reactive, illogical conclusions is; the healthy skepticism he advocates isn't just a knee jerk reaction to the chaotic misinformation he highlights. Rather, it emerges as the only healthy way to operate in this forest of unknowable futures.
You could say that it takes him over 400 pages to say "put most of your cash into broad, cheap, passive indexes, ignore the upheavals that come and go, ignore all forecasts, and think long, long, long term." But it is one thing to read that sentence, and another to admit that our brains have a hard time learning this lesson. If you are interested in reading this book, it's because you haven't learned it yet, so maybe 400 pages isn't too long after all.
Page 45 contains the basic nuggets of Ritholtz's wisdom:
"1. A well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.
2. A broad asset allocation model that is Core & Satellite: Mostly passive indexes, plus whatever ornaments you might want on the tree. Rebalance every few years. Repeat forever.
3. Cut the useless, distracting noise in your media diet."
"Never forget the simple truism: All forecasting is marketing, plain and simple."
Through this onslaught of seemingly repetitive stories, a pattern of thinking emerges and one begins to understand that Ritholtz's thesis is just how pervasive this tendency towards reactive, illogical conclusions is; the healthy skepticism he advocates isn't just a knee jerk reaction to the chaotic misinformation he highlights. Rather, it emerges as the only healthy way to operate in this forest of unknowable futures.
You could say that it takes him over 400 pages to say "put most of your cash into broad, cheap, passive indexes, ignore the upheavals that come and go, ignore all forecasts, and think long, long, long term." But it is one thing to read that sentence, and another to admit that our brains have a hard time learning this lesson. If you are interested in reading this book, it's because you haven't learned it yet, so maybe 400 pages isn't too long after all.
July 24, 2025
This book offers a fresh perspective on investing. In short, it outlines a financial plan designed to minimize mistakes:
*Own a globally diversified, low-cost portfolio of ETFs, and rebalance every few years.
*Keep fees and taxes as low as possible.
*Stick to a long-term plan while focusing on educators and credible sources in the media. I love this quote: "Even when events go crazy in the world, markets tend to shudder, then go back to whatever they were doing before.”
I appreciate how this book connects investing principles to nearly every part of life. In fact, compare it to “Who Will Take Care of Me When I’m Old?” by Joy Loverde. As someone in a caregiving role, I noticed several common threads between the two:
*View mistakes as valuable learning opportunities.
*Don’t let decisions run on autopilot—plan intentionally, not just for what you hope for, but for other contingencies as well.
*Track your thoughts over time. Date them and look for signs of growth and change.
*Take risks—do something that scares you every day. It’s a critical life skill.
*Own a globally diversified, low-cost portfolio of ETFs, and rebalance every few years.
*Keep fees and taxes as low as possible.
*Stick to a long-term plan while focusing on educators and credible sources in the media. I love this quote: "Even when events go crazy in the world, markets tend to shudder, then go back to whatever they were doing before.”
I appreciate how this book connects investing principles to nearly every part of life. In fact, compare it to “Who Will Take Care of Me When I’m Old?” by Joy Loverde. As someone in a caregiving role, I noticed several common threads between the two:
*View mistakes as valuable learning opportunities.
*Don’t let decisions run on autopilot—plan intentionally, not just for what you hope for, but for other contingencies as well.
*Track your thoughts over time. Date them and look for signs of growth and change.
*Take risks—do something that scares you every day. It’s a critical life skill.
August 19, 2025
Barry is clearly a knowledgeable guy, but his book left me with mixed feelings. He once admitted that when invited to do a daily one-hour finance show, he struggled because the “basics are so simple they can be explained in five minutes.” That challenge shows up in his writing too. The book feels padded—much of it repetitive, and much of it covering ground that anyone who has read even a few articles on value investing would already know.
That said, one comment really stood out. Barry challenges the cliché that “the U.S. dollar has lost X% of its value over the years.” He explains that the dollar is not meant to be a store of value but rather a medium of exchange. It’s a sharp distinction, and one I hadn’t seen articulated so clearly before.
That said, one comment really stood out. Barry challenges the cliché that “the U.S. dollar has lost X% of its value over the years.” He explains that the dollar is not meant to be a store of value but rather a medium of exchange. It’s a sharp distinction, and one I hadn’t seen articulated so clearly before.
June 11, 2025
Experience Matters
Solid advice based on decades of experience. No magic potions here. A lot of focus on the emotional side of investing. Advocates a longer term approach rather than trading and trying to time the market. I consider myself an experience fundamental investor but still learned a lot. last section of the book lists how things you can and cannot control should be a guide to your investment strategy. I thought that was brilliantly put, despite it being seemingly so simple! For me, one outcome of this book was that I stopped watching Jim Cramer and CNBC halfway through reading this book.
Solid advice based on decades of experience. No magic potions here. A lot of focus on the emotional side of investing. Advocates a longer term approach rather than trading and trying to time the market. I consider myself an experience fundamental investor but still learned a lot. last section of the book lists how things you can and cannot control should be a guide to your investment strategy. I thought that was brilliantly put, despite it being seemingly so simple! For me, one outcome of this book was that I stopped watching Jim Cramer and CNBC halfway through reading this book.
July 6, 2025
My key takeaways:
1. DCA investing into broad index funds is basically the best investment strategy. Index funds consistently outperform active investing.
2. Ignore the noise, ignore the scary news headlines. Tune out the gurus and forecasters and think for yourself.
3. Acknowledge your own biases and try to suppress your caveman instincts when investing. Don’t be an emotional investor.
4. When investing, think in decades. Don’t focus on the short-term. Be aware of cycles.
I really enjoyed this book. I like how the author touches on how psychology influences investing. Investing is a science, but it’s something that everyone can do regardless of skill level.
1. DCA investing into broad index funds is basically the best investment strategy. Index funds consistently outperform active investing.
2. Ignore the noise, ignore the scary news headlines. Tune out the gurus and forecasters and think for yourself.
3. Acknowledge your own biases and try to suppress your caveman instincts when investing. Don’t be an emotional investor.
4. When investing, think in decades. Don’t focus on the short-term. Be aware of cycles.
I really enjoyed this book. I like how the author touches on how psychology influences investing. Investing is a science, but it’s something that everyone can do regardless of skill level.
April 17, 2025
Since stumbling on his website in the early 2000s, Ritholtz has been a consistent influence for me. This book is a great summary of why I'm able to retire now. His understanding of human psychology shines throughout, and despite the size, the pages fly by. Each entertaining chapter is concise and leads into the next. I should also note this may be the least intimidating, most enjoyable investing book ever.
September 3, 2025
This book is not about strategy or tactics of investing. It is a book for those who are beginning to question their wealth and if there is anything they can do about their money.
The author provides some fun charts on when “not” to invest and shows the market is still growing.
The author also speaks on psychological state of being a human and how it messes up our investments if we do not pay attention to our state.
The author provides some fun charts on when “not” to invest and shows the market is still growing.
The author also speaks on psychological state of being a human and how it messes up our investments if we do not pay attention to our state.
June 1, 2025
Similar theme to 'Debunkery' by Ken Fisher, but also chimes with 'A random walk down Wall Street' by Burton Malkiel and 'The intelligent asset allocator' by Bernstein. Essentially, it's very hard either to pick winners or to control emotions when investing, so better to create a plan and stick to it, mainly involving passive index funds.
June 29, 2025
Being honest with your inner self
Simply, this book will force you to engage yourself in a very uncomfortable fashion. However, being honest with yourself can be commonly known as critically thinking. The end result is amazing. This book will be your financial guide book for that universe!
Simply, this book will force you to engage yourself in a very uncomfortable fashion. However, being honest with yourself can be commonly known as critically thinking. The end result is amazing. This book will be your financial guide book for that universe!
July 18, 2025
10/10. Great, entertaining book that details stock market history and emphasizes how horrendous everyone’s forecasting track record is. Other notable areas of emphasis are denominator blindness, the superiority of DCA, survivorship bias with Mutual Funds, lowering your bond allocation because lifespans have increased, and the revolution of direct indexing. Super easy read
August 21, 2025
Like many of you interested in personal investing, I have read many of these personal finance books over the last several years. As such, I was skeptical thinking what could said that hasn’t been said one hundred times before. I was very pleasantly surprised as Barry Ritholz has a very user friendly way of conveying various concepts and advice with some humor along the way. He is clearly not another Wall Street media type , talking head but someone who clearly has the retail investors best interests in mind! I thoroughly enjoyed it!
August 21, 2025
The book was very disappointing , nothing at all new here, especially for a seasoned investor who has read numerous investment books. Also somewhat contradictory given the numerous media appearances on CNBC, Bloomberg , etc where he and his associate Josh Brown offer stock advice to a very broad audience. He cautions against fo;;owing this type of advice in the book.
June 17, 2025
The book is a fast read and punchy. It provides 399(!) pages of stories and anecdotes about misconceptions and fraud to avoid. Totally worthwhile. It leads you to the core lesson that
Invest in Index funds and stop listening to experts on TV
Worth a read
Invest in Index funds and stop listening to experts on TV
Worth a read
June 20, 2025
Weak start with advice that drips over with common sense which makes you wonder why it is a book of a renowned investor. Great recovery in the second half the book though with good nuggets of information and honest recommendations.
July 5, 2025
Exceptional book on all the ways to lose money in investing. Highly recommended and a book to keep on your bookshelf for when you need a reminder of all the foolish mistakes all humans make when it comes to long term thinking. Fun and enjoyable read.
July 6, 2025
This is undoubtedly the best book I’ve ever read about finance. Very accessible. A great book for anyone who wants to accumulate wealth over a lifetime. As the author says: we (humans) were designed to avoid being eaten on the Savannah 10,000 years ago, not to manage wealth in capital markets.
April 2, 2025
Entertaining and a good review even if you've read about a lot of the topics he covers.
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