12 Rules of Investing

May 21st, 2005

The Big Picture has a run down of 12 Rules of Investing, and whilst some of it is a bit vague for me to make too much of it, a couple of the points stood out:

2. Don’t let a small loss become large.
Pride comes before a fall - if an investment isn’t working, don’t be too proud to get out rather than throwing good money after bad.

8. If you don’t understand the investment, don’t buy it.
Many of us are tempted by the latest investment opportunities, but if we don’t understand how the product works, should we really invest in it?

12. Expert investors care about risk; novice investors shop for returns.
We’re all excited by the prospect of big returns, but before investing we should work out whether the risk is really worth it (and everyone’s risk profile is different).

Categories: Investments, Stocks and Shares, Tips