Reading Minds and Markets
IN THIS SUMMARY
In Reading Minds and Markets, veteran financial adviser Jack Ablin reveals how to outperform the market with top-down, process-driven investing. Investors often wonder which stocks to choose, but investing based on individual stock picks starts with too specific a choice. A better risk/return ratio results from top-down investing, which begins by choosing between asset classes–stocks or bonds? More specific questions follow, ending with the choice of a particular investment. Starting at the top ultimately simplifies choices. Five factors drive the market: momentum, the economy, liquidity, psychology, and valuation. Data-based metrics for each of these factors facilitate deciding on the basis of fact, not emotion. Investments chosen by strict adherence to this process consistently outperform the market, at lower risk to the investor.