Investing Truthiness…

I get a lot of people that ask me about investing rules. I wish I could always practice what I preach. I wish I had the mentors and tools at my disposal today that I did when I first caught the investing bug. Here are my sic favorite and a bonus one for good measure:

1. Cash is King and a strategy.

If you are smart and/or lucky enough to have a bit of it, you hopefully know what I mean. Drawdowns of 20 percent are a fact of life if you take risk. Beyond that you are risking the franchise.

2. Diversification is overrated.

Bill Gates is only diversified because he has money managers and an estate plan to think about. You don’t have that problem.

3. Domain expertise is underrated

The faster you focus on building domain expertise the better. The more honest you are with yourself about your area of passion, better still.

4. Time is Money

We are terrible at measuring and valuing all the time we spend worrying, thinking and talking about money.

5. Keep hard costs down because you will suck at managing time

See truth number 3.

6. You can read Economists, just don’t invest with them or because of them.

See truth number 3.

PS – If you are a Beginner/Novice investor and like trading forex for anything more than a lesson in leverage or for entertainment, you will never have enough money to invest.

11 comments

  1. Pingback: Investing Truthiness… | forex
  2. Pingback: The diversification debate | Abnormal Returns
  3. Pingback: Wednesday links: losing the lost decade | Abnormal Returns
  4. Pingback: The Diversification Debate | Above the Market
  5. investingfordummies says:

    What I want to know is how to find an investment mentor.Where can we find these guys?

  6. Greg says:

    Have you ever thought about a wiki for all this great stuff?  It seems like it would be nice for navigating through the guides for new users instead of rolling off into archives.  Or is that not hip any more?  I can’t keep up.

Comments are closed.