A Wealth of Common Sense by Ben Carlson Summary

"A Wealth of Common Sense" simplifies investing by arguing that straightforward strategies outperform complex ones. Ben Carlson dismantles myths around market timing, stock picking, and institutional benchmarks, advocating for disciplined, long-term approaches rooted in behavioral finance. The book emphasizes diversification, emotional control, and aligning investments with personal goals to avoid common pitfalls.

Ben Carlson, CFA, is Director of Institutional Asset Management at Ritholtz Wealth Management and creator of the blog A Wealth of Common Sense. With over a decade of experience advising institutions and individuals, he’s renowned for translating complex financial concepts into accessible insights. Carlson has been named to Investment News’ “40 Under 40” list and co-hosts the Animal Spirits podcast.

Individual investors overwhelmed by market noise or contradictory advice will benefit most. The book suits DIY investors seeking disciplined frameworks, professionals wanting behavioral finance insights, and anyone aiming to avoid costly emotional decisions. Carlson’s plain-language style makes it accessible for beginners yet substantive for seasoned readers.

Yes—the book’s timeless advice on simplicity, behavioral pitfalls, and long-term thinking remains relevant. Readers praise its actionable checklists, real-world analogies, and critique of financial industry overcomplication. It’s particularly valuable for investors tired of chasing “get-rich-quick” strategies.

• Simplicity beats complexity: Fewer, well-chosen investments often outperform convoluted strategies.
• Behavior matters more than IQ: Emotional discipline prevents costly mistakes.
• Focus on longevity: Short-term volatility matters less than decades-long compounding.
• Diversify strategically: Balance risk/reward through asset allocation, not stock picking.

Carlson identifies cognitive biases like overconfidence and recency bias, showing how they lead to poor decisions. He provides frameworks to avoid panic-selling during crashes or overinvesting in “hot” trends, emphasizing self-awareness as critical to portfolio success.

Key checklists include:

• Assessing risk tolerance before major decisions
• Rebalancing portfolios annually, not reactively
• Avoiding performance comparisons to institutional benchmarks
• Prioritizing low fees and tax efficiency.

Carlson argues volatility is inevitable but manageable through diversification and a long horizon. Instead of timing markets, he advises dollar-cost averaging and viewing downturns as opportunities to buy quality assets at discounts.

Some advanced investors find its simplicity overly basic, noting it lacks technical strategies like options trading. However, most reviewers agree its core principles apply universally, regardless of portfolio size.

Both advocate low-cost index funds and long-term focus, but Carlson’s work delves deeper into behavioral psychology and institutional investing contrasts. JL Collins’ Simple Path targets early retirees, while Carlson addresses broader audience challenges like advisor selection.

• “Simplicity is the ultimate sophistication”: Complexity often masks poor strategies.
• “The more you trade, the less you keep”: Frequent transactions erode returns via fees and taxes.
• “Time in the market beats timing the market”: Long-term participation trumps short-term bets.

Its focus on emotional discipline and simplicity counters today’s AI-driven trading hype and cryptocurrency volatility. As markets grow increasingly fragmented, Carlson’s emphasis on foundational principles provides an anchor for rational decision-making.