Scott Nations

Scott Nations

We're often not completely rational when it comes to money, and doubly so when the value of our investments is being ravaged by a stock market crash or bear market. In times like these, and every investor is nearly certain to face several bear markets (a decline in stock values of at least 20 percent) during their investing lifetime, we're at our worst, succumbing to a variety of behavioral biases which undermine our investing results. None of these biases, not a single one, helps our investing results. Each of them is detrimental to returns. My latest book, "The Anxious Investor - Mastering the Mental Game of Investing," takes readers on an enjoyable narrative examination of three important stock market bubbles and subsequent crashes, in order to highlight these biases as they actually manifest themselves when we're investing during turbulent times. For decades, academics have tried to turn economics into a mathematically rigorous discipline more similar to physics than psychology even though economics is the study of how often-flawed human beings deal with money. "The Anxious Investor" will help readers recognize these biases in their own investing and by identifying them, the goal is to avoid falling prey to them when they can do the most damage. My previous book, "A History of the United States in Five Crashes," examined the five modern stock market crashes (The Panic of 1907, the quintessential stock market crash in 1929, Black Monday of 1987, the 2008 Financial Crisis, and 2010's Flash Crash) in a fast paced and engaging narrative which focuses on the similarities between crashes in order to help readers understand what causes crashes and how they unfold. As Mark Twain said, and as the modern stock market crashes prove, "History may not repeat itself but it rhymes." I'm the president and chief investment officer of Nations Indexes, the world's leading independent developer of volatility and option strategy indexes. Nations Indexes grew out of my previous work leading proprietary equity index option trading firms during 25 years as a floor trader at the Chicago Mercantile Exchange. During that work I created the Nations Indexes suite of option volatility and option cost indexes including VolDex® (ticker symbol VOLI) which measures implied volatility on the S&P 500 and TailDex® (ticker symbol TDEX) which quantifies how much investors are willing to pay to protect their portfolios. Nations Indexes has licensed VolDex® to Nasdaq which uses it as the base for the Nasdaq-100 Volatility Index (VOLQ). VOLQ futures trade at the Chicago Mercantile Exchange and VOLQ options will be available on Nasdaq exchanges soon.
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