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11 May 2009

Rules for Investing in the Next Bull Market

Recently, i came across an interesting article titled above.
And, i totally agree with what was written. Here, I would like to high-light to you these "profit-able" rules (if you believe...)

1. Go Global
Most investors prefer to stick to their "home" market. It's a mistake. Are you sure your country will gave you the best return? So, spread your bets across the board.

2. Avoid big moves
You probably won't catch the bottom or peak. Then, what's the rush? Why buy or sell heavily in one shot?

3. Remember the market is just "us"
Shares rose when everyone was buying, fell when they were selling. And when everyone is trying to predict the market, they are chasing themselves through a hall of mirrors.

4. Don't get fooled by the wrong tense
People (even economists) tends to say: "these shares have risen", "these shares are rising", "these shares will rise". Past...Present...Future tenses. Do not get suckered.

5. Pay no attention to TINA
Sooner or later someone will urge you to buy shares, even at very high prices, because There Is No Alternative. Especially at the peak of the market. There are always alternatives -- like holding cash.


6. Be truly diversified
Here means investing across a spread of different asset classes and strategies. Not, "large cap value" and "mid cap blend". Think carefully, it's Asset Classes and Strategies.


7. Treat forecasts with a grain of salt
Economists and analysts always found the reasons and predict the market direction, even if their views are wrong. So, do not take their forecasts the only source of information.


8. Never invest in what you don't understand


9. Ignore what everyone else is doing
It's natural to want to "join the crowd" and avoid being "left behind". When it comes to investing, do what's right for you.


10. Be patient
Do not rush into or out of the market. But, it doesn't mean patient enough to miss all the opportunities (see rule 11).


11. Don't sit on the sidelines completely until it's too late.
If you are afraid to invest, do it early, little, and often.

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