Stock Investing–25 Pearls Of Wisdom For The Individual Investor
Here are 25 Sensible Stock Investing ?rules? for individual stock investors.
–1. Remember Buffett?s Rule #1: Don?t lose money. Maintain a fiduciary duty to yourself.
–2. Pick only excellent companies to invest in. Avoid the ones with major flaws.
–3. Determine a rational value for any stock you are considering. Always try to buy at an advantageous price.
–4. Learn the difference between investable trends and noise in the market.
–5. Don?t get stuck in one way of thinking. In investing, as in life, seek balance.
–6. Remember that a 50% loss followed by a 100% gain equals zero. How likely is that 100% gain? If it is improbable, avoid the 50% loss in the first place.
–7. Manage your portfolio intelligently. Investing is not a set-it-and-forget-it activity.
–8. Any investment in the stock market carries risk. Learn how to manage it.
–9. Do everything you can to stack the odds in your favor.
–10. Read, analyze, and do your own thinking. Always keep learning.
–11. If you are interested in a company, write out its ‘’story” in a few sentences. If you can?t understand it enough to do that, don?t invest in it.
–12. The tortoise usually beats the hare over the long haul.
–13. Stocks don?t all go up and down together. Find the ones that are going up.
–14. Over the long term, stock prices follow corporate earnings. Look for companies with good prospects for sustained earnings growth.
–15. The market is rational over the long term and rewards sensible investing.
–16. Invest in dominant companies. They will be able to sustain earnings growth.
–17. Don?t trust management which has demonstrated lack of integrity.
–18. Investing should be fun. Read more…
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