The Anxious Investor: Mastering the Mental Game of Investing

by Scott Nations

A revelatory new guide to becoming a smarter investor, drawing upon behavioral psychology, economic modeling, and market history to offer practical advice for reaching your financial goals "With the equity and fixed-income markets off to a rough start in 2022, investors might do well to review the lessons shared in Mr. Nations’s book." — Wall Street Journal The human brain is ill-suited to making wise investment decisions. We are overconfident in our own knowledge and hunches, terrible at assessing risk, and prone to chasing financial thrills rather than measured long-term goals. Making matters worse, periods of severe market turbulence—whether the dotcom bubble of the late 90’s, the Great Recession a decade later, or the brief, vertiginous COVID crash of 2020—bring out our most irrational selves, at the exact moment when the consequences for investment mistakes are most severe. Scott Nations has spent his career studying market volatility. His firm, Nations Indexes, is the world’s leading independent developer of volatility and option-enhanced indexes. In  The Anxious Investor , he teaches readers how to understand markets, master their own fear, and make the most of their money. Drawing upon cutting-edge research in behavioral psychology, Nations shows that the secrets to excellent investing lie in mastering the quirks of human psychology. How are some investors able to make prudent decisions under pressure, while others rely on gut instinct to disastrous effect? How can we prepare for a market crash before it happens? And what can help us stay the course when the waters get choppy? Using the stories of three infamous market bubbles as his backdrop, Nations offers readers history’s hard-earned lessons about greed, volatility, and value. Whether you’re saving for retirement, a home, or a child’s college education, The Anxious Investor offers a blueprint for achieving your goals. While we can never know exactly which financial surprises may loom ahead, here is an indispensable resource for investors to make sense of them.

Genres: Nonfiction, Finance, Self Help

288 pages, Hardcover

Published April 5, 2022

Reviews

[Arup · Rating 2 out of 5]

Nothing any finance person doesn't already know. However, the last chapter enlisting all the biases is good to revisit every now and then.

[C · Rating 3 out of 5]

Too verbose on history of investment performance, but too little on mental and psychological pitfalls that investors suffer.

[Luis · Rating 2 out of 5]

Belongs in the psychology shelf, you get a general idea of what to do, but like most books about investing there are no specifics. You will learn nothing about investing and a few things about psychology but like those of us who are read it's something I already knew.

[Rigoberto Ruiz · Rating 4 out of 5]

Speaking as an avid finance reader, you are not going to find anything that is ground breaking. In fact, given the title, I expected more of a psychological take on the mind games that happen while investing. While the book did offer this to some extent (different heuristics) if felt that it was sorely lacking in terms of personality and how direct experiences could have shaped our decision making. Rather, it was focused on the pitfalls of the most notable stock market experiences that entire cohorts faced.

The majority of the book is more focused on the history of the stock market and bubbles. While these are important and are crafted fairly well, I think that it misses the mark for those that purchased this book on title alone. There was not enough discussion about global diversification, monte carlo simulations, or tax optimization.

Advice (And what you will find in most books of this nature) Invest in low cost well diversified index funds).

[Sean Wiseman · Rating 3 out of 5]

This book felt like two books in one. The first part is a mish-mash of history of the stock market and other related topics. However, the final quarter (Chapter 4 of 4 chapters) focuses on common investing mistakes and this is really the point of the book (even if some references will be missed for readers who did skip the first 3/4 of the book). It's worth reading, but, for most people, this final chapter will be all that is required.

[Sarah · Rating 4 out of 5]

Just as it is the nature of the stock market to fluctuate wildly, it is natural for investors to react irrationally to these shifts. Whether they are clinging to declining stocks to avoid realizing the loss, falling prey to herd mentality, or overreacting to what are ultimately just hiccups, the end result is always self-inflicted ruin. Nations breaks down a few of the most dramatic market crashes to illustrate exactly how and why investors shot themselves in the foot. His practical advice basically boils down to “Diversify” and “Don't Panic,” but the writing is engaging and the historical and psychological information are interesting.

[Scott · Rating 2 out of 5]

Mostly filler crap. You will not become a better investor reading this book. So many examples that contradict the point of giving the example. Main claim: Don't try to time or beat the stock market, it will destroy you. This may be true. But then he gives so many examples of time it REALLY was a mistake to just hold. But still, hold. Even though it's crazy to hold. Only good thing is the book is short. A few interesting historical bits.

[Tine’s Reviews · Rating 4 out of 5]

This is a beginner friendly book if you're someone interested in finance and investing. The author provided stories from the past and correlates it to the present time.

He also dissect each behaviors and how it affects into investing. I also appreciate that he added a source notes wherein, more resources if you wanted to learn more on topics he discussed.

[Jim Archambeau · Rating 4 out of 5]

Very good book on the mental aspect of how we react to markets. The description of each market event is a bit more in depth than needed, but how our minds work during the market moves is spot on. A lot to learn on how we think through market movement and the author does well in this book.

[Anne · Rating 3 out of 5]

One of the hardest this to do is to know when to sell stocks. I had hoped for some specific advice on when to call it quits. This was a read probably meant more for new investors rather than those who have studied investing.

[Anas Butt · Rating 4 out of 5]

The Author does a great job in highlighting key incidents in history when the stock market dropped but then rebounded. This helps the anxious investor understand that drops are only normal and actually healthy for the stock market.

[Joe · Rating 2 out of 5]

Basically a high-level overview of past market crashes. Nothing new...

[Craig Lair · Rating 3 out of 5]

Good history of market bubbles and bear markets and the psychology of investing.

[Navdeep Pundhir · Rating 2 out of 5]

A pretty average book! I was more sold on the idea of reading something new but the author tried too hard to fit in behavioral finance with history which didn't exactly turn out to be in sync.

[Steven C. · Rating 4 out of 5]

It gives a good history of market moments and lessons we can all learn. I’m experienced investor and learned a lot from this book

[Claire Siconolfi · Rating 4 out of 5]

I really enjoyed this book even though it is another regurgitation of financial and investing themes covered in other books. I did like how the author interspersed the various historical record with his commentary on investor mindset. I found it to be an easy, quick read.

[Mckinley · Rating 4 out of 5]

Fair amount of history to set the background for investing money.

[Lyndsey Bradley · Rating 2 out of 5]

Not bad, but a long-winded way of saying to think longer term and stay the course.

[Terri · Rating 2 out of 5]

Too much talking about the past. It is just like story telling.

[Dan Dawson · Rating 2 out of 5]

Okay. No real edge.

[Hon · Rating 3 out of 5]

Here, let me save you hours of reading by summing up the book in one sentence; stick with broad based ETFs and keep investing no matter what happens, then realize your gain in a few decades.


Read this if you wanna safely invest, not trade.
- author said there’s no such thing as a momentum in the market
- where the stock has been has nothing to do to where it’s going to go

The book just confuses me. Many things are contradictory.