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Scott's latest book,
"The Anxious Investor - Mastering the Mental Game of Investing"
offers a fascinating look at the behavioral biases that keep you from achieving your investing goals.


About Scott

Scott is the author of "The Anxious Investor" as well as "A History of the United States in Five Crashes."

Scott is also the president of Nations Indexes, Inc., the world's leading independent developer of volatility indexes and option strategy indexes.

The Anxious Investor

Nations’s advice is grounded and practical, and the wealth of research backing it will leave readers feeling like they’re in good hands. New and seasoned investors alike will find this worth a look.

Publishers Weekly

It's a key guide to financial literacy.

Circle Around

"The Anxious Investor" weaves the latest behavioral finance studies into an engaging narrative history that probes investor behavior...

The Wall Street Journal

The Anxious Investor

About The Book

The Anxious Investor - Mastering the Mental Game of Investing

by Scott Nations

About the Book

A revelatory new guide to building wealth amidst stock market crashes and uncertain economic conditions, drawing upon financial modeling, behavioral psychology, and market history to offer practical advice to everyday investors.

Investing is scary. Never is that more true than during market pullbacks and recessions, whether the Great Recession of 2008; the brief, vertiginous COVID crash in 2020; or any number of recent smaller, yet still wrenching, periods of economic turbulence. We see those flashing red numbers and all semblance of “planning” or “risk tolerance” suddenly goes out the window. We wonder: Will I ever be able to retire? Should I be buying GameStop stock? What, uh, is this stock market thing, anyway?

Scott Nations has spent his career studying market volatility. His firm, Nations Indexes, is the world’s leading independent developer of volatility and option-enhanced indexes. In The Anxious Investor, he teaches readers how to understand the markets, master their own fear, and make the most of their money.

In the first half of the book, Nations offers a quick, compelling rundown of the worst financial crashes in American history, focusing on their causes, the recovery, and the lessons each holds for today’s investors. Interwoven with these stories are fascinating cutting-edge insights into investor psychology: What makes investing so scary? What can behavioral science teach us about overcoming our “lizard brain,” which is notorious for making poor financial decisions? What can help us stay the course when the waters get choppy? In the book’s second section, Nations offers a roadmap that any investor can follow, with practical, easy-to-understand advice to help guide readers through the 3 different types of market conditions (normal, crash/bear market, recovery).

Whether you’re just starting out on your journey to financial literacy or are looking for an investing book to take you to the next level, The Anxious Investor is an invaluable resource.

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Reviews of The Anxious Investor

Investors can make bad decisions “because of the behavioral biases we’re all subject to,” advises Nations (A History of the United States in Five Crashes), president of the financial engineering firm NationsShares, in this useful guide to avoiding common financial mistakes. The key theme is that “the social aspect of investing... hinders success.” To tackle the fear and irrationality that often accompany investing, he warns against a wealth of biases: there’s the status quo bias, or “the irrational tendency to prefer choices that maintain the status quo even when other choices would leave us better off,” which readers can counter by ensuring their portfolio is diversified; hindsight bias, which entails “fooling ourselves into thinking that we [saw] it coming because it is all so obvious now,” though investors should remember they can never truly know what’s coming; and overconfidence, which “may be the most dangerous.” Along the way, he encourages tamping down harmful tendencies by using long-term analysis, reminding readers that “just because it happened recently doesn’t mean it is normal.” Nations’s advice is grounded and practical, and the wealth of research backing it will leave readers feeling like they’re in good hands. New and seasoned investors alike will find this worth a look.

Publisher's Weekly

History of the US in Five Crashes
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This new book is out from publisher William Morrow on April 5. Author Scott Nations recognizes one thing: That investing is scary, risky, and a place where there are no promises. As the president of financial engineering firm NationsShares, Scott has previously written technical books for option traders, and is a guest contributor to CNBC. Having spent his career studying market volatility, this book teaches readers how to make the most of their money through investing smartly, with both good and bad examples in history. It's a key guide to financial literacy.

Circle Around

The public is awash with books that treat finance as a science—from how-to manuals that offer a system for judging companies to dense treatises that identify statistical patterns or market inefficiencies. Lost in this sea of text is the fact that markets, ultimately, are made by people. In “The Anxious Investor,” options expert Scott Nations argues that the key to investing well, to borrow a hockey maxim, is to play the man, not the puck.

“Passions and emotions remain the most important aspect of investing,” Mr. Nations writes. “Learning about, understanding, and accounting for your own behavioral quirks can do more to improve your long-term investing results than even a roaring bull market can.”

Bear markets present a psychological challenge for investors. Losing money is about twice as painful as making money is pleasant—a phenomenon known as loss aversion. Investors typically sell when stocks go down, seeking to limit further losses. The result, Mr. Nations shows, is a tendency to “buy into bubbles and sell into crashes.” Investors sold off equities throughout the 2008 financial crisis, especially near the absolute bottom in March 2009. The decision to sell stocks during major downturns, Mr. Nations argues, is one of the worst habits of the investment community.

Mr. Nations’s last book, “A History of the United States in Five Crashes,” was a narrative history of Wall Street’s greatest panics. He has studied the math and history of market volatility, and his new book focuses on the psychology that drives it. Humans are social animals, and when their peers are selling and newspapers are full of panicky headlines about financial collapse, it’s extremely difficult to resist. “Herding is particularly dangerous on the downside of a bear market or stock market crash when the ability to think independently is simultaneously elusive and crucial,” Mr. Nations writes. The rational option, he says, is to be a contrarian during major market dislocations, even if most people prefer the comfort of the herd to making risky solo stands.

“The Anxious Investor” weaves the latest behavioral finance studies into an engaging narrative history that probes investor behavior during the South Sea Bubble of 1720, the tech boom of the late 1990s and the financial crisis of 2008. The author describes the various emotional pitfalls that can make sticking to an investment strategy difficult.

Overconfidence is one of the most significant challenges. Meteorologists make a high volume of forecasts, get immediate feedback on accuracy and can clearly measure their results. The same is true of horse-race handicappers. But investing is different. “The best investors trade infrequently; feedback can require years; and even then, ‘success’ is a subjective measure.” Investor confidence tends to correlate with recent performance, which usually has no predictive power over future results. Still, those on winning streaks become overconfident and take on more risk, while those on losing streaks focus on risk management and caution.

“None of the behavioral biases that humans display when investing—not a single one—generates better returns or minimizes risk,” Mr. Nations writes. To make better decisions, investors need to understand and overcome their instincts. He lays out what he believes is the simplest path to follow to achieve better results: buy and hold for the long term; invest primarily in broad-based index funds; and refrain from checking your portfolio too often lest you be tempted to act.

When trading individual stocks, investors anchor on their purchase price, and are more likely to sell their winning stocks than their losing ones. Locking in gains and waiting patiently for losers to turn around seems like a disciplined strategy, but a study of thousands of brokerage accounts found that the winners investors sold outperformed the losers they held onto by 3.4% over the subsequent year. The reality is that the disposition effect—“the tendency investors display when they sell their profitable investments and keep their unprofitable ones”—usually leads to worse outcomes.

Investors who hold index funds for the long-run tend to be less prone to these mistakes. “If you’re going to stay invested in broad-based, low-cost exchange-traded funds, you’re not likely to be susceptible to disposition,” Mr. Nations writes. “After all, selling to realize a gain doesn’t make much sense. What else are you going to buy? Another broad-based, low-cost ETF?”

Those who check their portfolios often tend to take too little risk; they prefer cash and fixed income to equities despite the better returns offered by stocks. These investors also tend to trade more often. One study Mr. Nations cites found that investors who traded infrequently achieved returns that matched the market, but the quintile of investors who traded the most lagged the market by about 7% per year. Those who do less earn more.


The economist Robert Shiller wrote that investing in speculative assets is a social activity and that investors “spend a substantial part of their leisure time discussing investments, reading about investments, or gossiping about others’ successes or failures in investing.” Mr. Nations argues that we’d be better off avoiding these social aspects of investing. Presumably reading books about investing or following financial experts on Twitter doesn’t cross the line.


With the equity and fixed-income markets off to a rough start in 2022, investors might do well to review the lessons shared in Mr. Nations’s book—and to try to conquer the anxiety that volatility can create even for the most seasoned and thoughtful financiers.

The Wall Street Journal

Earlier Books

A History of the United States in Five Crashes

Stock Market Meltdowns That Defined a Nation

by Scott Nations

About the Book

In this absorbing, smart, and accessible blend of economic and cultural history in the vein of the works of Michael Lewis and Andrew Ross Sorkin, a financial executive and CNBC contributor examines the five most significant stock market crashes in the United States over the past century, revealing how they have defined the nation today.

THE PANIC OF 1907; BLACK TUESDAY (1929); BLACK MONDAY (1987); THE GREAT RECESSION (2008); THE FLASH CRASH (2010): Each of these financial implosions that caused a catastrophic drop in the American stock market is a remarkable story in its own right. But taken together, they offer a unique financial history of the American century. In A History of the United States in Five Crashes, financial executive and CNBC contributor Scott Nations examines these precipitous dips, revealing how each played a role in America’s political and cultural fabric, one building upon the next to create the nation we know today.

Scott Nations identifies the factors behind the disastrous runs on banks that led to the Panic of 1907, the first great scare of the twentieth century. He explains why 1920s America adopted investment trusts—a practice that helped post—World War I Britain—and how they were a primary catalyst of the 1929 crash. He explores America’s love affair with an expanding stock market in the 1980s—which spawned the birth of portfolio insurance that significantly contributed to the 1987 crash. And he examines the factors that led to the 2008 global meltdown, and the rise of algorithmic trading, the modern financial technology that sparked the 2010 Flash Crash when American stocks lost a trillion dollars in minutes.

A History of the United States in Five Crashes clearly and compellingly illustrates the connections between these financial collapses and examines the solid, clear-cut lessons they offer for preventing the next one.

A History of the United States in Five Crashes

Timely. ... An eye-opening examination of the many ways money can be made—and disappear.

Kirkus Reviews

Fascinating. ... Uniquely helpful.

Publishers Weekly

Nations insightfully relays the parallel experiences of stock market meltdowns, the events that led up to them, and their resulting economic and social ramifications.


Absorbing. ...Nations's stylish writing gives these stories of greed and fear a cliffhanger momentum.

Financial Advisor Magazine

Crisp profiles...all ina lean, drive-ahead writing style that is a pleasure to read.

The Wall Street Journal

Employing a lively style, Nations’s entertaining and informative work will be appreciated by all readers desiring a survey on market crashes. This work joins Robert Z. Aliber’s and Charles P. Kindleberger’s classic Manias, Panics, and Crashes: A History of Financial Crises.

Library Journal

An incredibly rich mine of market indispensable resource.

Financial Advisor Magazine Books of the Year

One of the 25 best stock market audiobooks of all time.

Book Authority

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Reviews of A History of the United States in Five Crashes


The market collapse of 2008 remains a vivid memory today, not least for investors who are still trying to recover. For Scott Nations, a Chicago-based financial engineer, it is but one of a series of meltdowns that have periodically shaken the country’s financial stability. In “A History of the United States in Five Crashes,” he provides crisp profiles on the crashes in 1907, 1929, 1987 and, yes, 2008, along with the 2010 “flash crash”—all in a lean, drive-ahead writing style that is a pleasure to read.

His account of the 1907 crash opens with Teddy Roosevelt’s attempts to impose rules of competition on the country’s enormous business combinations. Railroad and copper wars were an unbridled spectacle of greed, even as the economy was rattled by the colossal 1906 San Francisco earthquake. Mr. Nations generally argues from the premise that, in nervous times, underlying imbalances are turned into catastrophic tsunamis by the mediation of a “financial contraption.” The contraption of 1907 was the trust companies, ostensibly staid entities that administered trusts and wills. The more adventurous ones gradually added deposit-taking and lending services.

Since trust companies had no reserve requirements, they had a cost advantage over conventional banks, which some exploited to the hilt. Foolish lending on paper-thin reserves created a string of trust-company insolvencies that threatened to engulf both the regulated banks and the New York Stock Exchange, setting the stage for the heroics of J.P. Morgan. Ill and turning 70, he peremptorily summoned leading bankers to his library and masterminded the capital infusions that ended the crisis.

Mr. Nations ascribes the 1929 market debacle primarily to the policies of the Federal Reserve, particularly those of Benjamin Strong, the imposing president of the New York Fed, who Mr. Nations believes fueled the stock-market bubble by easing interest rates in the mid-1920s in order to help Britain return to the gold standard. (Depression scholars still debate the question.) The “contraption” driving the 1929 crash was the investment trust, effectively a mutual fund that sponsors had “bulled” by means of insider trading, driving trust valuations far above that of the individual securities in the portfolio.

When the market finally broke, Mr. Nations tells us, the Stock Exchange closed its public gallery after “visitors watched a trader run screaming from the floor.” A physician at the exchange reported treating traders for the shell-shock symptoms he had treated in World War I. Although Mr. Nations’s account of the crash is excellent, he makes little attempt to connect it to the world depression that followed.

The market crash of 1987 occurred when markets were still working off the leveraged-buyout boom and other excesses of the 1980s. Two academics, Hayne Leland and Mark Rubinstein, came up with algorithms for hedging stock-market risk by selling offsetting options on the Chicago Mercantile Exchange. The catch was that they could only be implemented by computers. As the idea spread, it acquired the name of “portfolio insurance” and was catnip to big investors.

During the second week of October 1987, falling markets triggered the “insurance” algorithms launching wave after wave of option sales in Chicago. Alas, there weren’t enough options in the world to meet the flood of orders. “Black Monday,” Oct. 19, saw the steepest one-day drop in history. But it is hard to point to any damage to the economy. From 1986 through 1989, real U.S. growth came in at a boringly steady 3.5%, 3.5%, 4.2% and 3.7%, relegating the 1987 crash to a sideshow.

The episode that may best fit Mr. Nations’s paradigm—underlying instability and a new “contraption”—is the Great Recession of 2008-09. By the mid-2000s, the world had been sufficiently lulled by the Greenspan-Bernanke “Great Moderation” to accept that the idea that wisely applied monetary policy—feeding liquidity into the economy in measured doses—could smooth the unruliest economic tides. The “financial contraption” of the day was the structured securitized bond. Banks discovered that if they sold off their loans, after collecting hefty fees they could make higher profits without tying up their balance sheets. Securitizing mortgages and business loans made good sense so long as the underlying loans were sound. But in the absence of any regulatory oversight, shoddy, often fraudulent, paper came to dominate the market and was sold all over the world, with dire effects second only to those of the Great Depression.

Mr. Nations’s last example, the 2010 “flash crash,” is quite dramatic, but like the 1987 market crash doesn’t seem to have been especially consequential. A Kansas mutual fund with Greek exposure contracted with Barclays bank to exit a $4 billion position. Barclays had built algorithmic trading technologies for managing massive portfolio adjustments without human intervention. When Barclays switched on the trading robots in the afternoon of May 6, the stock, options and futures markets went crazy. Perfectly sound companies saw their shares gyrate between $1,000 and a penny within minutes. While estimates that as much as a trillion dollars was lost in minutes are likely true, the losses were mostly recovered a few minutes later, and the most ridiculous trades were reversed by the end of the trading day.

One takeaway from Mr. Nations’s chronicle is that finance is a dangerous industry for the simple reason that—as we can see in each of his episodes—it employs enormous leverage. Today the biggest banks have balance sheets in the trillions, 90% of it borrowed. When the bull starts roaring, and the money is flowing, calamity is usually not far behind.

The Wall Street Journal

Nations, CNBC contributor, president of NationsShares, and author of Options Math for Traders (2012), writes about five significant U.S. stock market crashes in 1907, 1929, 1987, 2008, and 2010, respectively. These crashes have similar characteristics, and each defined an ensuing period of economic challenges. Nations cites a great many sources, including economic reports, government documents, trade magazines, and newspapers. He covers the specific details of each crash and explores how and why each occurred. Covering complex responses, from investment trusts to the Troubled Asset Relief Program (TARP), makes for content that may be complex for the general reader, but the minute-to-minute details are fascinating. Readers who enjoy financial history, political economy, and the work of Andrew Ross Sorkin may find this all interesting. Nations insightfully relays the parallel experiences of stock market meltdowns, the events that led up to them, and their resulting economic and social ramifications.

Booklist, Raymond Pun

Can we time the market? No, but this timely book by an investment executive and CNBC contributor gives some idea of how various the triggers for its collapse can be.

The five market crashes Nations (The Complete Book of Option Spreads and Combinations, 2014, etc.) chronicles are comparatively recent, the first from 1907, the last from 2010. This lifts some of the predictive power from the author’s argument, since the so-called panic of 1893 was easily as severe as any of its successors, while some of the crashes of the early republican era were similarly devastating. Even so, the overarching points are valuable. Nations points out that investment in the market is key in moving the economy forward and that it has indeed led to individual enrichment; he notes that a dollar invested in 1899 would have been worth nearly $157 at the time of the 2010 hiccup. However, he adds, had we not experienced the ruinous crash of 1907, the whole package would have been worth another $45 or so, and if we had been able to avoid the five worst days of the ever cresting and falling cycle, then that dollar would have been worth $319.24. Nations describes some of the mechanisms for these moments of free fall, ranging from malfeasance in the market to technical glitches in our increasingly prevalent computer-driven trades. Interestingly, some of the market crashes, by the author’s account, were set in motion by the government’s doing the right thing in restraining monopoly, short trades, and other examples of the free market gone bad. Do what we will to avoid them, though, crashes are a function of that market and the people who participate in them, fiscal evidence of uncertainty and fear. As Nations also writes, though the climb back can be agonizingly slow, the market eventually recovers. In an account with more villains than heroes, indifferently written but full of useful object lessons, Nations concludes with the warning that for all that, “it will crash again.”
An eye-opening examination of the many ways money can be made—and disappear.


In studying the stock-market crashes of 1907, 1929, 1987, 2008, and 2010, CNBC contributor and investment professional ­Nations offers a comparative history on how crashes occur. For the 1907 panic, he details the backdrop of the San Francisco earthquake, President Theodore Roosevelt’s trust-busting campaign, and the poor capitalization of the burgeoning trust company sector. He explains that all it then took to spook investors and crash the market was a mistake by one of the trust companies. For each ensuing financial disaster, Nations similarly lays out the root causes, profiles the central actors, and offers a fast-paced narrative of the events leading up to it. In drawing parallels among the five events, he concludes that the triggering mechanism in each was a poorly understood financial innovation that, when stressed, spiraled out of control, tearing the markets apart. VERDICT Employing a lively style, Nations’s entertaining and informative work will be appreciated by all readers desiring a survey on market crashes. This work joins Robert Z. Aliber’s and Charles P. Kindleberger’s classic Manias, Panics, and Crashes: A History of Financial Crises.

Library Journal

Nations, a CNBC Contributor, offers a fascinating look at five major stock market crashes: the Panic of 1907, Black Tuesday, Black Monday, the Great Recession, and the Flash Crash. Nations observes that stock market crises mean more than just tanking investment accounts. They also stop people from investing, impacting job availability and the economy as a whole. While these failures don't have a single cause that is easy to recognize before hand, he asserts that all five studied here share important indicators. for one, they all had an external catalyst. He connects the Panic of 1907 to the 1906 San Francisco earthquake, which spurred insurance claims predominately held by British insurers, causing a global bump in interest rates. nations goes into equal depth on each case study, sharing stories such as that of Angeliki Papanthanasopoulou, a pregnant bank employee in Athens killed in 2010 by rioters venting anger over the Greek debt crisis, which then triggered the Flash Crash. Nations's focus on underlying causes is uniquely helpful give the complexities of the ever-changing and intricately connected global economy.

Publisher's Weekly

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