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The Laws of Wealth

Psychology and the secret to investing success

By Daniel Crosby

Hardback £25.00 / $35.00
eBook £19.00 / $28.99
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The Laws of Wealth

Psychology and the secret to investing success

By Daniel Crosby

Jacket text

GOLD MEDALLIST IN THE AXIOM BUSINESS BOOK AWARDS 2017

From New York Times and USA Today bestselling author, Dr Daniel Crosby, comes the behavioral finance book all investors have been waiting for.

In The Laws of Wealth, psychologist and behavioral finance expert Daniel Crosby offers an accessible and applied take on a discipline that has long tended toward theory at the expense of the practical. Readers are treated to real, actionable guidance as the promise of behavioral finance is realised and practical applications for everyday investors are delivered.

Crosby presents a framework of timeless principles for managing your behavior and your investing process. He begins by outlining ten rules that are the hallmarks of good investor behavior, including ‘Forecasting is for Weathermen’ and ‘If You’re Excited, It’s Probably a Bad Idea’. He then goes on to introduce a unique new taxonomy of behavioral investment risk that will enable investors and academics alike to understand behavioral risk in a newly coherent and complete way.

From here, attention turns to the four ways in which behavioral risk can be combatted and the five equity selection methods investors should harness to take advantage of behaviorally-induced opportunities in the stock market. Throughout, readers are treated to anecdotes, research and graphics that illustrate the lessons in memorable ways. And in highly valuable ‘What now?’ summaries at the end of each chapter, Crosby provides clear, concise direction on what investors should think, ask and do to benefit from the behavioral research.

Dr. Crosby’s training as a clinical psychologist and work as an asset manager provide a unique vantage and result in a book that breaks new ground in behavioral finance. You need to follow the laws of wealth to manage your behavior and improve your investing process!

About the author

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist, behavioral finance expert and asset manager who applies his study of market psychology to everything from financial product design to security selection. He is co-author of the New York Times bestseller Personal Benchmark: Integrating Behavioral Finance and Investment Management and founder of Nocturne Capital. He is at the forefront of behavioralising finance. His ideas have appeared in the Huffington Post and Risk Management Magazine, as well as his monthly columns for WealthManagement.com and Investment News.

Daniel was named one of the "12 Thinkers to Watch" by Monster.com, a "Financial Blogger You Should Be Reading" by AARP and in the "Top 40 Under 40" by Investment News.
When he is not consulting around market psychology, Daniel enjoys independent films, fanatically following St. Louis Cardinals baseball, and spending time with his wife and three children.

Reviews

I think The Laws of Wealth should be read by all those new to investing.

Jim O’Shaughnessy

First Book Investors Need to Read to Be Successful…One of the useful features of this book is the “What’s new” summary sections at the end of each chapter.

Les Masonson, author Buy – Don’t Hold and ETF Columnist for Technical Analysis of Stocks & Commodities Magazine

Dr. Daniel Crosby is one of the preeminent behavioral psychologists in investing today, and it shows with this tour de force of how an investor can manage their wealth. With these few simple rules, investors can easily build a framework allowing them to thrive, even when their human instincts try to sabotage their investing. Get this book!

Aaron Klein, CEO at Riskalyze

When I’m looking for sharp, against-the-grain insights on how we can and should make better investing decisions, I always turn to Daniel Crosby. If he s publishing, blogging, or Tweeting, I want to know about it. It also doesn’t hurt that he’s often hilarious in taking our built-in foibles and creating the potential for ending up in a much better place than we would otherwise. This book is yet another fantastic contribution to the practice of sound (and sane) investing.

Dr. Brian Portnoy, Head of Investor Education at Virtus Investment Partners

Step away from CNBC and into financial therapy! People often think that buy low, sell high is the first (and only) rule of investing. This deceptively simple phrase motivates most, if not all investors, and yet many investors fail to successfully follow this simple mantra. In The Laws of Wealth, Daniel Crosby explains why we struggle with deceptively simple investment decisions, suggesting that first rule of profitable investing is to get out of your own way.

Meredith A. Jones, Author, Women of The Street: Why Female Money Managers Generate Higher Returns (And How You Can Too)

Drawing the connection that what makes us interesting as humans can make us unsuccessful at managing our money in times of turbulence, Dr. Crosby provides a safe haven with his framework for success. This book is not only informative but enjoyable, as he gently exposes how human behavior impacts our decision making.

Noreen D. Beaman, CEO of Brinker Capital, Inc

Individual investors are often their own worst enemies, whether they re selling when they should be buying, focusing on their stocks day-to-day swings or letting the media drive them into a panicked emotional state. In Dr. Daniel Crosby s newest book, he breaks down how to implement a set of easy-to-follow rules to keep investors on track. Don’t let your mind ruin your investing outcomes. Read his book and arm yourself against yourself today.

LouAnn Lofton, The Motley Fool

Using lively and engaging real-life examples Dr. Crosby gives insights into innate human behavior and its role within the financial markets. In this entertaining book he provides brilliant invaluable practical framework for investors, financial professionals and anyone in search of true wealth.

Dr. Svetlana Gherzi, Behavioral Finance Specialist, UBS

The financial services industry is broken and has for too long ignored the human factor. Savvy investors and advisors understand that emotions, decisions and behavior are at least as important as big returns and Dr. Daniel Crosby explains just that in The Laws of Wealth

David Geller, CEO, GV Financial

Media coverage

From Money Marketing:

Myth 3 – A client’s investment portfolio should meet or beat a relevant investment index or benchmark The only benchmark that matters is meeting one’s personal financial life goals and to do that you need a personal plan that gives proper context to saving, investing and spending decisions. As behavioural finance expert Dr Daniel Crosby… Read more »

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From The Resilient Advisor:

Dr. Daniel Crosby is one of the industry’s top thought leaders on Behavioral Finance. He authored the New York Times bestseller ‘The Laws of Wealth’ and is the host of the popular Standard Deviations podcast. Daniel recently joined Brinker Capital as the Chief Behavioral Officer. On this episode we discuss how financial advisors can leverage… Read more »

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From The Acquirer’s Multiple:

This week we’re going to take a look at twenty of the best books on investor pyschology. 16. The Laws of Wealth: Psychology and The Secret To Investing Success (Daniel Crosby)

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From Market Watch:

Simple choices — putting money aside for retirement, increasing contributions once a year, holding tight during market volatility — are what drives investors to success, said Daniel Crosby, author of “The Laws of Wealth: Psychology and the secret to investing success” (Harriman House). “Despite the unequivocal truth that investor behavior is a better predictor of… Read more »

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From Investment News:

Despite the enormous wealth creating power of the market, looking at it too closely can be terrifying. In the latest episode of “On Your Best Behavior,” Daniel Crosby looks at the immortal words of Jack Bogle: “Don’t do something, just stand there!”

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From Benzinga:

Dr. Daniel Crosby is a well-known author and speaker on Behavioral Finance and brings the scientific perspectives, research, and insights on the topic.

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From Successful Farming:

Daniel Crosby, founder of Nocturne Capital and author of a new book, The Laws of Wealth, points out that the familiar can be a danger when you’re aiming to diversify. “Our familiarity with something makes it appear less risky, which is why people tend to overinvest in the stock of their employers and tend to… Read more »

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From Value Walk:

An interview with Dr. Daniel Crosby On Behavioral Finance: The Laws of Wealth Which behavior or behavioral trait do you think is the most damaging for investors and their returns? One of the shortfalls of previous works on behavioral finance is that they present lists of investor biases with no organizing framework. At my last… Read more »

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From The Key Point:

Psychologist Daniel Crosby works in the field of behavioral finance. “Given that you, as a member of the human family, have tendencies toward impatience, arrogance and a fetish for complexity, it is very likely that you will screw this up… At my last count, psychologists and economists had documented 117 biases capable of obscuring lucid… Read more »

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From Seeking Alpha:

Investing is full of potential obstacles. Most investors think that if they could just figure out what happens next, they can easily avoid the future obstacles in their path. But few investors ever realize that the biggest obstacle is themselves. The Laws of Wealth: Psychology and the Secret to Investing Success shows investors how to… Read more »

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From Just Means:

The Behavioral Benefits of Values-based Investing New article and Video by Dr. Daniel Crosby, President of Nocturne Capital and the New York Times bestselling author of The Laws of Wealth. I am a son of the American South and a student of her often troubled history. A native Alabaman, I now live in Atlanta and… Read more »

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From Axiom Business Book Awards:

ATLANTA – Axiom has announced the winners and finalists of THE 2017 BUSINESS BOOK AWARDS on February 15, 2017. Winners were announced in each of 22 business categories with The Laws of Wealth: Psychology and the Secret to Investing Success (Harriman House) taking the Gold Medal in the Personal Finance/Investing category. Awards were presented for… Read more »

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From ValueWalk:

Dr. Daniel Crosby joins us today to discuss his latest book, The Laws of Wealth, where he explains how human psychology presents the both the biggest obstacle to investment success and the greatest source of returns over others. GOLD MEDALLIST IN THE AXIOM BUSINESS BOOK AWARDS 2017 From New York Times and USA Today bestselling… Read more »

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From ValueWalk:

Michael welcomes Daniel Crosby, author of “The Laws of Wealth: Psychology and the Secret to Investing Success.” His background is in behavioral psychology and he sees the markets as a great backdrop to view human behavior in a real world setting. Michael and Daniel start breaking apart the efficient market theory into two concepts: 1.… Read more »

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From The AAII Journal :

At a time when our political landscape is as divisive and contentious as it has ever been, it should come as no surprise that the active versus passive debate in investment circles mirrors the broader decampment into “Us” and “Them.” But if there is one benefit to all this dissension, it is that deeply held… Read more »

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From Fidelity :

This doesn’t look like it’s going to be a particularly interesting book. But it is in fact interesting and entertaining, and deals with some of my favourite investing subjects with such infectious aplomb that I’ve found myself quoting sections to friends and colleagues and becoming something of a bore. But the fact that most of… Read more »

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From Shares Magazine:

Only nine stocks in the FTSE 350 haven’t bounced back after Brexit vote shock Do you have the confidence to buy shares when there is a sudden drop in the broader stock market? Judging by the size and speed of the bounce back in equity valuations since the Brexit vote shock, it certainly pays to… Read more »

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From Quake Books :

It is with great pleasure that we, at QUAKE Books, invite Daniel Crosby, a psychologist, behavioural finance expert and author of The Laws of Wealth to our headquarters to talk wealth, its laws and any obstacles our readers need to be aware of in order to obtain and maintain it. The Laws of Wealth is… Read more »

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From Journal of Financial Planning: Practice Management Blog :

Law #2 – You Cannot Do This Alone In an era of seven-dollar trades and fee compression, some have been quick to dismiss the traditional advisory relationship as a relic of a bygone era. Years ago, brokers and advisers were the guardians of financial data, the keepers of the stock quote. Today, investors need only… Read more »

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From BullBearings :

How to eat and not get eaten Bear markets are tough on everyone. Even the best traders can lose the plot. Trying to run the winners might stop working – because there are no winners. When that happens, there might only be one logical way to make money: shorting. When a shark sees the market… Read more »

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From MarketWatch:

Warren Buffett’s mentor Benjamin Graham famously said, “The investor’s chief problem — and even his worst enemy — is likely to be himself.” Graham sure knew his subject. Consider: The 30-year annualized return for the S&P 500 SPX, -0.36% average was 10.35% through 2015, but the average investor in the U.S. market pocketed just 3.66%,… Read more »

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From Financial Services Marketing :

I had the privilege of meeting New York Times bestselling author Dr. Daniel Crosby at FinCon in 2014. During his keynote address at the conference, he spoke about the intersection of finance and behavioral psychology. As anyone in the financial industry knows, investors’ emotions and behaviors can make or break the achievement of their goals.… Read more »

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From Master Investor:

Behavioural finance, in my view, is one of the most interesting and thought provoking areas of economics. Instead of focussing on the ways humans, or “Homo economicus”, should behave in relation to their decisions, as traditional economic theory does, behavioural finance attempts to explain exactly why we as investors decide to make the choices we… Read more »

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From Investing by the Books :

This is something as unusual as a practical book on behavioral finance. Where the discipline for too long has focused on disproving the so-called Modern Portfolio Theory and listing psychological quirks among investors, Daniel Crosby takes things one well needed step further and applies the theories on real life investing. The stated aim of Crosby… Read more »

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From Sixpence Media :

What do you get when you combine a clinical psychologist with an asset manager? You get, Doctor Daniel Crosby, and the fascinating world of behavioural finance. We’ve all probably poured over one of those monster lists of cognitive biases at one time or another. It’s interesting stuff, but isn’t much use unless you know what… Read more »

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Contents

Acknowledgements
Preface or: How I Learned to Stop Worrying and Read this Book
Introduction: Of Worms & Wealth

Part One. The Rules of Behavioral Self-Management
Paradox of Primates & Formalwear
Rule #1. You Control What Matters Most
Rule #2. You Cannot Do This Alone
Rule #3. Trouble Is Opportunity
Rule #4. If You're Excited, It's A Bad Idea
Rule #5. You Are Not Special
Rule #6. Your Life Is The Best Benchmark
Rule #7. Forecasting Is For Weathermen
Rule #8. Excess Is Never Permanent
Rule #9. Diversification Means Always Having To Say You're Sorry
Rule #10. Risk Is Not A Squiggly Line
Applying the Rules of Behavioral Self-Management

Part Two. Behavioral Asset Management
The State of Money Management
Managing Behavioral Risk
The Four Cs of Rule-Based Behavioral Investing
The Five Ps of Equity Investing

Epilogue. Behavioral Investing in a World Gone Mad

Bibliography
Index



Published: 27/06/2016
Edition: 1st
Pages: 286
Formats: hardback - ISBN 9780857195241
ebook - ISBN 9780857195258
Media enquiries

If you’d like to get in touch with the author for interview or comment, or you’d like a review copy of this book, please contact us at pr@harriman-house.com or call +44 (0)1730 233870.

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