Rules to successful investing

Rule No. 4- Know yourself and check your Ego

2010-02-26T04:54:00.003-08:00

Rule No. 4- Know yourself and check your Ego
Smart investors have an awareness of their psychological weaknesses and seek to manage them. Examples of these include overconfidence,which is the tendency to overreact to the current state of the world,the tendency to look for confirm evidence and innate bias towards optimism or pessimism.A key to successful investing is to leave your ego at the door.

Rule No.3 –Remain open minded and flexible

2010-02-26T04:54:00.001-08:00

Rule No.3 –Remain open minded and flexible
Markets regularly prove even the best investors wrong. One should constantly consider contrary views and test against your own.It is useful to have some form of stop loss which sometimes is painful but may be necessary as market can be rather irrational which no one can predict accurately.

Rule No.2 – HAVE A DISCIPLINED PROCESS

2010-02-26T04:53:00.002-08:00

Rule No.2 – HAVE A DISCIPLINED PROCESS
Having a disciplined process is absolutely essential for investors who want to move away from a long term strategy and become more actively involved in timing investments into and out of markets or stocks.This should ideally rely on a wide range of indicators such as valuation measures (whether markets are expensive or cheap,economic indicators,technical readings on historic price patterns for the share market ,market sentiment( the crowd is often wrong –so if everyone is bearish that is likely to be a good sign and if everyone is bullish that is likely to be a bad sign.However one problem or setback to actively managed investments can be costly and time consuming and often well beyond what most investors would do.
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Rule No. 1 – RESPECT THE MARKET

2010-02-26T04:53:00.001-08:00

Rule No. 1 – RESPECT THE MARKET
Investors should know that investment markets are not always rational.But there are numerous examples of investors who though they were better than the market.In fact sometimes market can stay irrational for longer than you can stay solvent .In other words you may even have a view that ultimately things are all right but could end up losing a lot of money if you get the timing wrong.For many this means the best approach to investing is to adopt and follow a long term strategy consistent with one objectives.

4 rules to successful investing

2010-02-26T04:51:00.000-08:00

FOUR RULES TO SUCCESSFUL INVESTING
The Last two years have been tough for many investors.Since 2007 we have seen shares have been on a roller coaster ride with one crisis after another with one of the worst financial crisis never seen since 1937.
In view of what had happened it may be good for investors to know some of the rules for successful investing.