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RE: The 10 Investment Commandments
Great Points! Very Interesting Read!
I think #8 is the most profitable advice but also the hardest!!
- from a psychological standpoint it's nearly impossible for a "normal" human being to be a contrarian and buy when everybody else is panic-selling (a very strong plan and analysis with some "convition buys" on your list can help tremendously)
And as you rightly pointed out yourself, **I think # 10 "Trust Your Gut" is indeed bad advice. **
Because this hits home exactly during times of crises (where your gut would most probably tell you that there must be something to everyone selling) and in times of bubbles (where your gut tells you that you must oversee something, why else would everybody be buying).
Same as with #8 a strong plan & analysis, a set strategy and knowing "why" exactly you think it is a good investment is way better than your gut.
Thank you!
#8 Is definitely something that requires strict discipline and training.
It took me a while to put this rule into effect 100% of the time, I struggled doing it because I always thought it was not the right move, but every single time, buying in the red would have been the better decision.
I suppose this would interfere with #10, because you are right, in times of chaos your gut is telling you to pull out. It has happened to me, which is actually how I've lost a decent stake in some areas. But, there have been times I have had a strong gut feeling that holding would be the best option, and it ended up being a good choice.
For a new investor, #10 is definitely not the best advice, so I will change it.
Thank you for pointing this out; reasons why I enjoy when people leave genuine comments!
Thanks for your reply! You're welcome! Genuine comments for genuine articles ;-) Keep it up!