Monday , 17 June 2024

Next Time You’re Overcome By Market “Noise” Consider These 27 Rules

“…On average, the market falls 10% once a year, about 20% every four or five years, about 30% every decade, and 50% a few times during your lifetime but the market always recovers and reaches new highs… It’s the investor who stays invested, regularly investing through good and bad, who ends up with the incredible long-term returns.”

Prepared by Lorimer Wilson, editor of – Your KEY To Making Money! 

[Editor’s Note: This version* of the original article by Chris Reining has been edited ([ ]), restructured and abridged (…) by 39%% for a FASTER – and easier – read. Please note: This complete paragraph must be included in any re-posting to avoid copyright infringement.]

“I want to share these rules [in the hope that]…they can provide some counterbalance the next time you feel “noise” is making decisions for you:

  1. Long-term investing doesn’t mean weeks and months, it means years and decades.
  2. Buy-and-hold investing works, but it only works if you buy and hold through ups and downs.
  3. Frequent trading is the fastest way to achieve poor returns.
  4. Being intelligent doesn’t result in better investment results, but being disciplined does.
  5. How you behave is much more important than how your investments behave.
  6. Investing isn’t about mastering the market, but mastering yourself.
  7. Having a financial plan, and then sticking to it, outperforms having a plan.
  8. If you’re fearful when the market goes down it’s likely you have too much invested.
  9. Money you know you need in the next three to five years doesn’t belong in stocks.
  10. Jumping from one trendy investment idea to another is how to get poor results.
  11. More effort is counterproductive to good investment returns.
  12. Don’t buy because the market is going up, and don’t sell because it’s going down.
  13. Buying when everyone else is panicking is easy to say and challenging to do.
  14. In hindsight, crashes and recessions always look like amazing opportunities.
  15. When the market is going up investing is easy.
  16. Buying and holding makes you money, buying and selling makes other people money.
  17. Compound interest can make you rich, but it takes an incredibly long time.
  18. Successful investing has little to do with IQ and a lot to do with personality.
  19. If you invest in index funds you can’t beat the market.
  20. If you invest in active funds there’s a high probability you’ll underperform the market.
  21. Picking stocks and beating the market is possible but gets more difficult over time.
  22. Trading is exciting, but asset allocation has more to do with your returns.
  23. Higher returns means more volatility, more stability means accepting lower returns.
  24. Simple portfolios beat complex.
  25. There’s no such thing as the best investment.
  26. “It will fluctuate” is the right answer about market predictions.
  27. And remember, you’re not Charlie Munger or Warren Buffett.”
(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)

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