How Not to Invest: The Ideas, Numbers, and Behaviors that Destroy Wealth―And How to Avoid Them

by Barry Ritholtz

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.

Genres: Finance, Nonfiction, Business, Economics, Personal Finance, Money, Audiobook

496 pages, Hardcover

First published March 18, 2025

Reviews

[Camelia Rose · Rating 4 out of 5]

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...

[Navdeep Pundhir · Rating 5 out of 5]

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

[Ali · Rating 5 out of 5]

Ritholtz gives the ultimate guide on avoiding investment mistakes. My default reaction is "mistakes were made but not by me" (stealing from the title of famous Carol Tavris book) -yes, after 400 pages I'm still in complete denial :) Anyhow, now I'm working on damage control (my way of inversion :) Better late than never. Therefore, this was a great read for me to go over the basics of behavioral market economics and common mistakes sprinkled with many cases, anecdotes, and great references.

[Asta · Rating 5 out of 5]

A definite 5* from me.

Highly recommended to anyone and everyone interested in investing.
No-nonsense approach, lots of excellent examples, straight to the point, pleasure to read.

Worth reading and re-reading.
Chapeau!

A good follow-up to this book is author's podcast "Masters in Business" (Bloomberg).
I look forward to listening to its many episodes!

"Time, not timing, is key to investing success."

"Self-awareness and humility are enormously valuable traits for any investor."

"You might be surprised to learn that I believe the three most important words in investing are, "I don't know". Not saying those three words has cost investors billions."

"Investing is the art of using imperfect information to make probabilistic assessments about an inherently unknowable future."

"At the very least, I suggest three simple things:
1. A well-thought-out 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."

"The future is inherently unknown and unknowable. Those who claim otherwise are selling something."

"If you learn nothing else, at least learn this: Never confuse day-to-day noise with an actual reason to make a change in your portfolio."

"To manage your personal finances properly, you need only follow three rules:
No. 1. Spend less than you earn.
No. 2. Prioritize investing for your future.
No. 3. Figure out what matters to you, then spend accordingly."

[Blaine · Rating 3 out of 5]

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.

[Bob Engeman · Rating 5 out of 5]

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!

[Ferhat Elmas · Rating 4 out of 5]

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.

[David · Rating 2 out of 5]

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.

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.

[Kursad Albayraktaroglu · Rating 5 out of 5]

This was an excellent read - time will tell how popular it will be over time, but Ritholtz probably deserves a seat in the Pantheon of investment book authors alongside Malkiel, Bernstein, Swedroe and others. I read many (perhaps too many) investment books over the years, but this book had quite a few facts, anectodes and statistics which were completely new and intriguing to me. Younger investors will particularly benefit from the actionable advice given towards the end of the book, but investors of all stripes and experience levels will find something for them in this thoroughly well-written work.

[MARC DES ROSIERS · Rating 2 out of 5]

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!

[Barry · Rating 3 out of 5]

3.5 stars (between good and very good)

Even this guy, who makes his money deciding how to invest other people’s money, admits that active management almost never beats passive indexing over time, and that it’s impossible to time the market or pick stock winners.

The book is not exactly systematic, but there’s still a wealth of useful information here, albeit delivered in a snarky scattershot fashion. One example is explaining the potential tax benefits of Direct Indexing. As more investors take advantage of this option, I can’t help wondering whether the government will eventually eliminate the ability to reduce taxes through tax loss harvesting altogether.

[R MANOJ KUMAR SINGHVI · Rating 5 out of 5]

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.

[Maarten Smit · Rating 3 out of 5]

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.

[Jessica · Rating 4 out of 5]

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.

[Elisa Sacchetti · Rating 4 out of 5]

This one took me a while to get through, but overall it was very informative and eye-opening. While some of the lessons weren’t shocking—since I already knew (even subconsciously) many of the concepts—I really appreciated how the book reinforced what I already understand and how I currently invest! It was a great validation of my approach and a solid reminder of why discipline matters. Time in the market > timing the market.

[Bruce Kellison · Rating 1 out of 5]

This is a sophomoric compilation of newspaper and magazine columns, not much more than a collection common-sense bromides ("Don't listen to your Uber-driver's stock tips") and the like. Run the other way from those, and this book.

[Anuraj Pandey · Rating 5 out of 5]

excellent book
relisten
hardcopy
highly recommend

[Liquidlasagna · Rating 2 out of 5]

Basically a book that says, rebalance your investments once, maybe twice a year, or maybe just don't invest

oh and only bet what you think you can risk
ugh

if you like just slightly lame funny books
that only seem to be based for beginners
with a high tolerance for corny humor

I guess it's okay if you got it cheap
just for the cool cover

Studying the reviews, I'm convinced

this is a book trying to tell people not to be a lemming
yet
the book has some of the most fawning, uncritical and lemming-like unchallenged assumptions about behavioral finance.

basically he doesn't state that the classics are nothing but questionable, overhyped shit

Kahneman - Thinking, Fast and Slow
Thaler - Misbehaving
Zweig - Your Money and Your Brain
Housel - The Psychology of Money

it's the psychology of the lazy merely stating we're emotional and make mistakes and they make a a bunch of over-simplied dreck for their pet theories.

Pet theories that few people want to challenge, because

a really interesting critique of Kahneman was this:

"you’ll get a great look at the desperate attempt to inflate the menial contributions of a career academic. After 300 pages, I actually began to feel quite sorry for the author. All he does is discuss the work of others while trivializing their conclusions with the powerful anecdote of hindsight… This reads like the academic version of a mid-life crisis. The book is quite frankly painful to read and unintelligible at times. If anything, you can try buying books from the scholars he references the whole time. You know, the ones who actually do the thinking,"

"Way too long to essentially explain 2 ways our mind generates thoughts. System 1 is always on, the first impressions, what you see is all there is. System 2 is the analytical thinker, thinks outside the box, thinks to understand etc. Certain situations require system 1 and certain system 2. Certain situations require both.."

A 500 page hardcover that says
A - we judge a lot with our first impressions [we have snap judgemens]
B - we also think deeply, often outside of the box [we question shit]
sometimes one works, or the other, and sometimes both

great what every smart 11 year old person knows

////

Housel's book isn't about psychology, it's more about odd little history lessons on the stock market

and what rich people did

a bunch of stories about the psychology of the stock market, in the most shallow way possible

and the psychology of financial decisions needs more than Art Buchwald telling a funny story he heard in at lunch, two blocks from Wall Street in May 1966.

////

Thaler's book
- people make mistakes fixated on short term results
- people cling to what they have and make lousy decisions
- people like things that make investing easy for them

////

Zweig - a book on how the brain works, and going for a real stretch to apply it to investing

basically a really dumbed down version of Kahneman which probably is an improvement
so you know it's boring and it will not improve your money or your brain

but you got a book with brain scans

and it's a great book if you want a boring book that really says nothing,
based on Kahnement saying,
sometimes we make snap judgements
and sometimes we don't.

And wash your eyes out with bleach, because you're fed up with the dumb shit these people write

Zweig's conclusion?
The Think Twice strategy

- Never put all your eggs in one basket
- Spread out your bets
- What goes up, must come down - All you need to KNOW about Wall Street
- Never buy a stock or a fund just because it's really really really going up

Basically what every 8 year old knows after reading their 12th Mad Magazine


//////

My friend, Barry Ritholtz, the fund manager, has a great book called How Not to Invest, which, believe it or not, is interesting, even if you aren’t in investing. He’s just really a lot of fun.
Paul Krugman

The Wild Amazone

Skip this waste of time

Very disappointing. Ritholtz offers nothing new here, and he takes so very many pages to do it. Why did he write it? For a good return on time invested in reading try John Bogle's books.

Ann T

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A book I wish I hadn't bought

This might be a good book for someone who knows nothing or next to nothing about investing. Otherwise, skip it.

As for the humorous stories, I have heard most of them many times before. How funny is the joke heard the fifth time?

Here is an example of Ritholtz's investing 'advice':

"Bonds play a crucial role in any portfolio. I will skip the basics of interest rates, duration, credit risk, and creating ladders ..."

You don't have to worry about getting bad advice from others when the above passes for good advice.

Robert Kirchner

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Underwhelmed!

Very disappointing!

This guy cannot provide any synthesis. Just a list of things that can go awry.
No insights at all.

If I wrote this stuff at the U of C business school on the ‘70s no gentleman’s C for me.
Just pulp.

Mark T. Campbell

/////

Not worth your $10

Overall, ironic, he/they are a part of the very machine between you and your $. RWM is the new propaganda machine. Spewing nonsense, with some great kernels of advice, mixed with confusion, and endless stories as to prove, see I'm smart!. Amazing you can get some good points lathered in terrible advice. I keep wanting more from these guys, but continue to be disappointed.

Insight

/////

Excessively Redundant

The book was well written but excessively redundant. The content of the book could have been summarized in a few pages:

1 Select an allocation commensurate with your risk
2 Buy low (or zero) fee index funds
3 Rebalance 1-2 times per year
4 Don’t trade
5 If you can’t control your emotions, hire an RIA

Larry C

/////

Bad investment

A collection of anecdotes. Long-winded and sometimes not very understandable.

The author is looking for a cheap punchline rather than giving good advice.
I've half read it and wouldn't buy it again.

Anonymous, Germany

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Morbidly obese

Entry level advice, in my opinion.
Took 500 pages to say the same as a long read in a magazine.

Mister Wood

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Enjoyable

I enjoyed reading the book because it agreed with my views fully, ironically confirmation bias - as the book does talk a lot about cognitive biases.

In hindsight I wish it had challenged me more.

Chinnifer, England

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Good in some parts, poor in others

It is claimed that what differentiates serious amateurs from professionals is that the latter have systematically eliminated avoidable errors.

Whether true in all fields, Ritholtz’s book is shaped by this idea and delivered with both humour and clarity.

Despite being around 472 pages, it reads more like a transcript of many individual presentations grouped by topic rather than a typical tome on investing, it’s easy to dip into and out, and it is hard to avoid being caught up in his enthusiasm.

There is little that is entirely original in content, but the author usually cites his sources visibly and the end notes are extensive.

Rather its contribution is to curate a wide range of material in a single book. The target audience is the individual retail investor, though it can also be of use to professionals as a ‘refresher’.

The book is structured into four major themes – Bad Ideas, Bad Numbers, Bad Behaviour, and Good Advice.

The first three of these are divided into subcategories.

Bad Ideas looks at money-losing advice, the media through which this is spread, and the often crooked language that deceives us.

A firm grasp of numbers, statistics and basic probability is needed to understand how the economy, markets and shares actually behave in reality, and the pitfalls are examined in Bad Numbers.

Both themes are reprised in Bad Behaviour which examines how we behave and think about money. In each of these themes not just the mistakes that we make but remedies are given.

The final theme, Good Advice, does what it says on the tin. Not just avoidance of mistakes but strategic solutions.

A brief Conclusion completes discussion.

Only four rather than five stars are warranted. Ritholtz is excellent when discussing most themes, but behavioral finance is the weakest because here he is far less critical of received wisdom.

This largely comprises the acumen of four authors – Kahneman’s Thinking, Fast and Slow, Thaler’s Misbehaving, Zweig’s Your Money and Your Brain, and finally Housel’s The Psychology of Money.

These writings are applied to consider avoidable mistakes, emotional decision-making, and so called cognitive deficits.

Initially this may seem too harsh. Ritholtz is in good company as most of the investment industry, providers of MBAs and other professional training have also embraced so called ‘Behavioural Finance and Economics’ uncritically, as though it was accurate.

Both Kahneman and Thaler became Nobel Laureates in economics, despite Kahneman self-identifying as a psychologist.

Both might appear unimpeachable and frequently cited sources.

Zweig, a journalist, interviewed several ‘neuroscientists’ before presenting his personal view of the relevance of the field in general to finance.

Housel, also a financial journalist, presented his own interpretation the literature.

The positive contribution of Behavioural Finance was to challenge the risible notion that all human decision making was entirely ‘rational’.

The unanswered question is where is the real world evidence supporting Behavioural Finance, not just as a theory, but in practice?

Playing Monopoly is fun, but real life decision-making may be very different. This involves the loss of real money - your own.

The laboratory experimental situations designed to test these theories were equally artificial and contrived.

Numbers taking part were very small, and typically the results obtained were hard to reproduce, if at all.

Claims made within Behavioural Finance were often exaggerated and overgeneralized, instead of just suggesting ideas to try out in the real world.

Bluntly, Ritholtz appears to accept all this totally uncritically as established knowledge about how we make real life financial decisions. It weakens the value and utility of his book.

Despite the serious shortcomings with the treatment of Behavioural Finance, this book is still worth purchasing and reading for the target audience, but with four stars only.

M. Chamarette

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Many entertaining anecdotes that are fun to read, and some helpful pieces of advice

The central thesis of the book is that we know nothing about the future of the economy and the stock market.

The author admits that there are about a dozen investors who have beaten the market continuously, but he says that they are “the exception that proves the rule”.

One may puzzle as to why not consider them an empirical refutation?

And according to Piketty’s Capital in the Twenty-First Century, there are many more than a dozen, for example, university funds.

Still, the book includes many entertaining anecdotes that are fun to read. The final section comprises some practical and valuable pieces of advice.

AM

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The second half of this good book is more useful than the first half

I liked this book (and I like all books like this), but thought it could have been half the length. Very quickly in, I was convinced that human behavior is complicated and thus experts typically are more lucky than they are consistent in their predictions, and yet the book focused on that topic forever.

The content got more useful (and applicable) in Parts 3 and 4.

I found the analyses of human cognitive biases that lead us astray very helpful and used some of that information to adjust my portfolio in ways that will make it more likely for me to stay the course over the long run without tinkering so much from year to year, beyond balancing.

As I often feel these days, I wish that I would have read and internalized the last section of this book 20 years ago.

I would have been much more aggressive with my allocation in my 30s and 40s and less likely to tinker with anything other than my overall equity share in my early 50s.

Hunter

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Great Reference for Index Investors

Very good reference book for index investors that primarily buy and hold etfs, mutual funds and stocks.

I’m a John Bogle disciple and have been so for over a decade now so much of the material was old hat for me.

It is not an anti investing book but tells a cautionary tale about following the Wall Street short term investment machine.

I am enjoyed the short chapter format and found a lot of humor in the book along with sage advice.

Theodore Stamas

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Needlessly Lengthy But Entertaining

Ritholz's concept of "wetware," from our "lizard brains," is valuable.

He presents in small bites, which I liked, but the amount of repetition was excessive as was the number of ways you can go wrong in investing versus the few ways you can get it right.

bpolejes

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The difference between a serious operator and a lemming

I have been professionally running money for 30 years.

Barry has just put in one book many of the common falacies that the above average investor make on a regular basis.

This is not a wall street how to book.
This is an anti wall street what not to do book. Essential reading if you are a serious operator

Mike

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[George McDonald · Rating 3 out of 5]

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

It’s almost as if your portfolio compounds over time regardless of the news....

[E]ven when events of great geopolitical significance occur, markets tend to shudder, then go back to whatever they were doing before.

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.

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

[Carl · Rating 5 out of 5]

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.

[Ohmny Romero · Rating 5 out of 5]

I picked this up on May 31st and immediately found it one of the more approachable and clear-eyed personal finance books I’ve read. Barry Ritholtz’s central message is simple but powerful: don’t chase gurus, don’t follow hype, and don’t forget that risk is everywhere—even in places that look safe.

The first half of the book dismantles a lot of myths. Experts aren’t oracles, doomsayers aren’t automatically wrong, and flashy statistics are meaningless without context (18,000 tech layoffs sounds terrifying until you realize it’s a fraction of all hires in the same period). Survivorship bias, availability bias, and the lure of “buying the dip” are all traps investors fall into. The alternative? Stick to boring, tax-efficient, low-cost index funds. The book makes a compelling case that they should make up the vast majority of any portfolio.

Part three (“Bad Ideas”) highlights the risks of active management and speculative investing, using case studies from Bernie Madoff to Sam Bankman-Fried. Ritholtz’s emphasis on being **process-focused** rather than **outcome-focused** resonated with me—long-term conviction matters more than short-term wins. He reminds us that even the smartest investors (or funds) often underperform the market, and that “alternative” strategies carry more risk than reward for most people.

The final section circles back to practical advice: invest slowly, keep emotions out of it, keep 95%+ in index funds, and only use a sliver of your portfolio for speculation. The framework of strategies—ranked by difficulty, likelihood of success, and time horizon—really drives home that the easiest ways to build wealth take the longest, but are also the most reliable.

What I appreciated most was how approachable the book feels. It doesn’t overwhelm you with jargon or push a “get rich quick” mentality. Instead, it emphasizes patience, discipline, and avoiding mistakes others have already made. It’s invigorated me to double-check my own investments while reminding me not to overthink or tinker too much.

This is the kind of book I wish every 20-year-old with a Robinhood account would read before throwing money at meme stocks or TikTok-fueled strategies. The best mistakes to learn from are the ones someone else already made.

**Rating: 5/5 – A must-read for anyone who wants a grounded, realistic approach to investing.**

[Jan Tell · Rating 5 out of 5]

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.

[Kris · Rating 2 out of 5]

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.

[H · Rating 5 out of 5]

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.

[Dan Filo · Rating 2 out of 5]

Not a personal finance classic

I certainly can’t take issue with any of the advice but beyond the tennis analogy about playing to not make mistakes there was not much new here and I didn’t really like the style. He used a lot of anecdotes to “prove” his points. Again I think his points were correct but the approach is odd.

Having a chapter that essentially ends by saying broad indexes do you can be sure to own the winners followed immediately by a chapter on trading advice was a bit of a head scratcher.

[Ira · Rating 3 out of 5]

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.

[Patrick Carley · Rating 5 out of 5]

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!

[Alex Pellicci · Rating 5 out of 5]

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

[Peter N. Rukavena · Rating 2 out of 5]

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.

[William Dupre · Rating 3 out of 5]

Bit of an aggregation of investing truisms that I think most people with money in the market are well aware of in 2025. You can’t predict the future or time the market, passive index investing is likely your best bet, compounding interest is powerful, etc. Some great quotes and anecdotes made it tolerable.