Chapter 4 - General Investing Guidelines & Tips (Sneak Peak...)

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1”  – Warren Buffet, famous American investor

Now that we have explored the reasons why you should invest (Chapter 1), what markets are out there and what makes them tick (Chapter 2), and which investment vehicles are available to you (Chapter 3), we are ready to look at some important guidelines and tips that will enable you to make sound investment decisions.  Hopefully, the guidelines and tips discussed in this chapter will serve as a guide and will lead you on the path to investment success.  I truly believe that if you follow the advice I give in this chapter, you will become a very good investor and you will be able to achieve the goals and dreams you have defined for yourself.  Now let’s get on to those golden rules of investing.  Some of the following guidelines are not new and have been outlined by many wise investors over the years.  I have, though, added a few of my own, accompanied by some practical tips along the way.  The eleven guidelines are:

1. Get started and keep at it
2. Don’t invest in what you don’t understand
3. Do your homework
4. Diversify.  Diversify.  Diversify.
5. Buy low, Sell high
6. Manage risk
7. Have an investment strategy
8. Follow-up on your investments
9. Tune-out the noise
10. Take some profits and cut your losses
11. Re-balance your portfolio