Are Black Swans Really Harmful to Ordinary Investors?

By Dale Maley

Nassim Nicholas Taleb popularized the term Black Swan through his books and interviews. Taleb’s Black Swan Theory refers only to unexpected events of large magnitude and consequence and their dominant role in history. This short story explores whether or not Black Swan events are really important to ordinary Main Street investors versus Wall Street traders.

• Language: English
• Publisher: Dale Maley
• Release date: Aug 29, 2010
• ISBN: 9781452372761

Dale Maley

Dale C. Maley is the author of the 19999 book Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pros.He is also a contributing author to Chapter 18 Seeking Help from Professionals in the 2009 book The Bogleheads Guide to Retirement Planning.He is a very successful private investor who has been a student of Financial Planning and Investing for over 30 years. He was trained as an engineer at the University of Illinois and has been a practicing engineer for 32 years. His accomplishments as an engineer include the granting of 16 U.S. Patents and authorship of over 500 professional technical papers. He is also a member of the International Society of Automotive Engineers and the Society of Manufacturing Engineers.He also has earned an MBA (Masters Degree in Business Administration) degree from Illinois State University. His background in mathematics, engineering, and business provides him with the excellent basis for understanding and teaching investments and financial planning.He is also a very successful investor who has been investing in common stocks and mutual funds since 1980. He has also personally invested in both 401(K) and IRA plans, so he is familiar with participation and management of these types of investments. He has been investing in indexed common stock mutual funds since 1990.Dale became a Registered Financial Advisor in the State of Illinois in 2006 and is currently launching his business as a fee-only financial planner. He is President of Maley Financial Planning LLC.

Book preview

Are Black Swans Really Harmful to Ordinary Investors?

by

Dale C. Maley

SMASHWORDS EDITION

PUBLISHED BY:

Artephius Publishing on Smashwords

Are Black Swans Really Harmful to Ordinary Investors?

Copyright © 2010 by Dale C. Maley

All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise) without the prior written permission of both the copyright owner and the above publisher of this book.

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Table of Contents

Chapter 1

Black Swans

Chapter 2

Normal Distributions

Chapter 3

Non-Normal Distributions

Chapter 4

Distribution of Daily Stock Market Returns

Chapter 5

Distribution of Annual Stock Market Returns

Chapter 6

Behavioral Finance

Chapter 7

Summary

Bibliography

Web Sites

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Warning-Disclaimer

This book is designed to provide information in regard to the subject matter covered. It is sold with the understanding that the publisher and author are not engaged in rendering legal, accounting, insurance, or other professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

It is not the purpose of this manual to reprint all the information that is otherwise available to the author and/or publisher, but to complement, amplify, and supplement other texts. You are urged to read all the available material,