Daily Traders Edge

7 Investing Rules To Remember As Stocks Hit Record Highs – MarketWatch

June 07
14:18 2017

“The investor’s chief problem — and even his worst enemy — is likely to be himself.” — Benjamin Graham

There are seven investing rules that have stood the test of time. They are not unique or new. Like Mom’s chicken soup for a cold, the rules are the rules. If you follow them, you succeed. If you don’t, you don’t.

As the U.S. stock market, represented by the S&P 500 Index SPX, +0.20% is near a record high, it’s especially important to heed these rules.

Here they are:

1. Sell losers fast; let winners run: It seems like a simple thing to do, but when it comes down to it, the average investor sells his winners and keeps his losers, hoping they will come back to even.

2. Buy cheap and sell expensive: You haggle, negotiate and shop extensively for the best deals on cars and flat-screen televisions. However, you will pay any price for a stock because someone on television told you to. Insist on making investments when you are getting a “good deal” on it. If it isn’t, it isn’t. Don’t try to come up with an excuse to justify overpaying for an investment. In the long run, overpaying ends in misery.

3. This time is never different: As much as our emotions and psychological makeup want to always hope and pray for the best, this time is never different than the past. History may not repeat exactly, but it surely rhymes awfully well.

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