Re-Visiting My Rules for Investments

It is worth going back to your rules of investing from time to time.  This is what keeps us grounded and disciplined so that we do not start following the latest trend.   Remember that slow and steady wins the race.  Warren Buffet once said ” I am greedy when others are fearful and fearful when others are greedy.”  The take away message is that oftentimes we are swayed by panic.  For example, in 2008 GE one of the Worlds greatest companies was trading just below $6.  I purchased some but I wish I had purchased more as the company is now pushing $20 a share.

So are some rules:

  • I am an investor–I do not trade my investments frequently.
  • I am also a saver–I routinely invest each month using my savings.
  • I know every asset has risk and I consider the risk before buying.    I accept the risk by owning a diversity of assets.
  • I have an investment plan and plan for allocation.
  • I invest regular amounts each month in both falling and rising markets.
  • I spread out my investments among stocks and bonds.
  • My share of bonds equals my age.
  • I rebalance once a quarter.
  • I know that stocks are risky in the short run but not so risky in the long run.
  • I force myself to sell high and buy low.  Patience is the key here.
  • I put at least 20 percent in international assets.
  • I stick to my plan and try not to check my stock balances every day (this one is not easy).
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