Anyone interested in managing their own investments should read this book by William Bernstein. Pillar One is The Theory of Investing. Pillar Two is The History of Investing. Pillar Three is The Psychology of Investing, and Pillar Four is The Business of Investing. He concludes the book by discussing investment strategy using the four pillars.
(Go here to read a recent magazine interview where he discusses investment strategy.)
The chapter on a history of manias goes back in history and highlights some incredible times in the past when whole societies were caught up in investment madness. The end result was always a crash. Our recent housing bubble has a lot of similarities to past manias. We definitely can learn lessons today by studying examples from the past.
Bernstein does not have kind words for financial brokers. The reason is that anyone with the time to educate themselves doesn't need to pay commissions to an adviser. In fact, that is the only reason to ever have a broker. Everyone else can do it on their own. The only reason I have a job as a financial representative is because there are a lot of people who, for one reason or another, are not educated and are not interested in doing their own investing.
Read the book, and use it to jump start your education.
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