Here are some more of Morgan Housel’s “Rules for Investors”.
“I don’t know are three of the most underused words in investing.”
No one knows what the market will do next month. No one knows when interest rates will rise or where the price of oil is headed. Listening to people, who say they know, is likely to cost you a lot of money.
“Change your mind when the facts change.”
Understand why you made an investment. When the facts change, admit you were wrong. Learn from your mistakes and ignore those who refuse to do so.
“You should pay the most attention to investors (and advisors) who talk about their mistakes.”
How many times have you been in the company of someone who freely discusses their investment or casino successes, without any mention of what didn’t go so well? Everyone makes mistakes, the people to listen to are net winners, who are wiling to assess both the good and the bad.
“Read past stock-market predictions and you will take current predictions less seriously.”
Markets are complicated and human emotions are unpredictable. Predicting what stocks will do in the short run is incredibly difficult.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®