Buy low. So simple in concept. So diffi cult in execution. When prices are high, a lot of investors are buying a lot of stocks. Prices are low when demand is low. When investors have pulled back, people are discouraged and pessimistic. But, if you buy the same securities everyone else is buying, you will have the same results as everyone else.

There’s no free lunch. Never invest on sentiment. Never invest on a tip. You would be surprised how many investors do exactly this. Unfortunately, there is something compelling about a tip, its very nature suggests inside information, a way to turn a fast profi t.

Do your homework or hire wise experts to help you. People will tell you: Investigate before you invest. Listen to them. Study companies to learn what makes them successful.

Diversify—by company, by industry. In stock and bonds, there is safety in numbers. No matter how careful you are…you can neither predict nor control the future. So you must diversify.

Invest for maximum total return. This means the return … after taxes and infl ation. This is the only rational objective for most long-term investors.

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