Monday, 1 October 2012

Rules of Investing

Good post from The Big Picture as they have a column out in the Washington Post on rules of investing.

We have 6 rules today, and 6 more rules next week:
1 Cut your losers short and let your winners run
2 Avoid predictions and forecasts
3 Understand crowd behavior
4 Think like a contrarian (occassionally)
5 Asset allocation is crucial
6 Decide if you are an active or passive investor

Generally, a lot of the difficulties with investing lies in the psychology.  Buy low, sell high sounds simple but obviously not considering how many people buy and sell at exactly the wrong time.

Hit the link for the full story.

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