Book Review: The Prepared Investor: How to Prevent the Next Crisis from Affecting Your Financial Independence by Christopher Manske

This shares some good advice to help any investor prepare for inevitable market drops.
The Prepared Investor: How to Prevent the Next Crisis from Affecting Your Financial Independence
by Christopher Manske

Hardcover : 240 pages
ISBN-13 : 978-0990439660
Publisher : Changing Lives Press (October 20, 2020)
Genre: Investment, Nonfiction
My Rating: 4.25 of 5.0.

Why do some crises affect the stock market far more than others? When faced with disaster, why do investment advisors keep telling clients to just be patient? Christopher Manske reveals that investing through crisis is very different from the standard dogma accepted today. Like Outliers showed a different way to look at success and Nine Lies About Work turned the establishment upside down on leadership and teams, The Prepared Investor demonstrates how readers can protect and grow their net worth in the face of calamity. By offering a new lens to examine major catastrophe, Manske gives a compelling and instructive approach to maximizing one’s portfolio despite tomorrow’s uncertainty. Using twenty specific action steps that highlight how different crises affect investors, readers will see how a few National Guardsmen sank the entire stock market, how the secret Napoleon knew explains investors’ selling behavior, and why a simple statement from particular leaders can be just as much a crisis as an airplane flying into the World Trade Center. Manske shows readers how foolish it is for Wall Street to approach all types of calamity with the same “just hold on” solution.

Review:
Mr. Manske shares specific examples of crises in the past with graphs showing how the market reacted in each case. He also provides hypothetical cases of prepared investors and how they might react when a crisis hits. I really appreciate how the author lays out specific action steps to take to prepare for a variety of crises. I particularly liked how Manske suggests keeping a journal of important leaders and news events to develop a pattern of cause and effect. This is to allow the investor to be ready (or at the very least less surprised) when a perceived catastrophe impacts the market. A prepared investor can move to use a crisis as an opportunity to gain instead of just submitting to sudden loss.

In addition to preparing for major market fluctuation, Manske provides some fascinating historical details which enhanced the financial aspects of the book for me. I learned that issues that might seem important to smaller investors might not cause the same response by the large investors. The author explains the factors that impact market flow and this helped me to see a broader picture and to better understand how foreign and domestic news might trigger reactions particularly from the large institutional investors who are really the entities that have the ability to move the market up and down.

I have been investing in the stock market since the market drop in March of this year so I am still new to the field. I can say from my limited experience that it is important to study before risking any funds in market investing.

The book is laid out in a fashion that builds on twenty action steps. The author provides graphs and history which helps the information flow more easily so it is not overwhelming. It is written at a level and in a format that can be understood by less experienced investors. I would recommend The Prepared Investor as an important help to a new investor like me, but I think it would have good insight and information for longer term investors too, even if just to reinforce and remind them of actions that they may have already learned but are not implementing as well as they might.

Source: My thanks to Mr. Manske for offering this book for my review. This qualifies for my 2020 Author Review goals.