Challenging Investment Myths: Insights from Mike Dever

Business Insider recently interviewed Mike Dever to discuss some of the 20 investment myths he covered in his bestseller, Jackass Investing: Don’t Do It. Profit from It. One of these myths challenges the widely accepted notion that a 60-40 stock-bond portfolio offers sufficient diversification. Mike originally presented evidence against this years ago, but the synchronized stock and bond downturns of 2022 underscored this point for many investors.

In both the book and interview, he emphasizes that since most investors act on emotion rather than following a rational, systematic approach, there’s potential to profit by doing the “opposite” of the crowd. For instance, rather than chasing top-performing stocks and funds, it’s often more effective to focus on those that have underperformed over the past five years.

This contrarian approach suggests value-based stocks over high-flying large-cap tech stocks, which currently dominate market capitalization.

Read the full interview on Business Insider.