In this post, I review the new book The Mindful Investor: How a Calm Mind Can Bring You Inner Peace and Financial Security(December 2009).
There are two authors:
- Maria Gonzalez – founder and president of a consultancy that coaches business leaders on the use of “Mindfulness” techniques
- Graham Byron – investment advisor and certified financial planner
Whats it about:
The first half of this book, likely written by Gonzalez, discusses how investors can use meditation techniques to calm their minds when their portfolios are down. The second half, likely written by Byron, is about financial plans, portfolio construction, client-advisor relationships, estate planning and other standard fare in personal finance.
I can understand how Zen-like meditation techniques might be used by a day-trader or other short-term trader to try and calm the emotions. They are riding a roller coaster of volatility every day and their portfolios follow suit. Indeed, an example of a trader using Zen techniques is Zentrader.ca.
But such traders would likely be better off getting a book that focused exclusively and at length on Zen or other calming techniques. Half of this book is a basic manual on personal finance. And the part on meditation is less than 80 small-sized pages.
If you are a long-term investor, stock market fluctuations shouldnt really bother you if you are doing it right. First, if your portfolio is down 25% and you are losing sleep, you didnt choose an asset mix right for your risk tolerance. Second, you should be rebalancing your portfolio and maintaining your desired risk level. Third, you should know that stocksearn good returns over the long run, going by the historical record.
The Mindful Investor: How a Calm Mind Can Bring You Inner Peace and Financial Security(December 2009).