I am no investing genius, let’s all understand that now. Sure, I have a few mutual funds, a 401k, and the other common items but I am in no position to state whether or not I did it correctly. Further, I am not the guy to tell you how to do it and what to watch for.
But, I have someone that may be. I don’t know Alan Haft and (no offense to him) I don’t care to in the professional sense. However, I do enjoy reading his articles. He speaks about pure investing and how to manage your money. What makes this blog different is that topics are really explained in a way that anyone can understand.
Anyway, after that long intro, I wanted to share a helpful article he wrote that can really help anyone. It’s named The 10 Commandments of Investing and as implied, these are the basic rules one should follow when beginning to invest for the long term.
Here is one of the ten points. I agree with them all so consider this a sample:
6. Don’t rush in
You’ve likely heard the saying “only fools rush in.” On every level, rushing into things can cause great harm. Whether it’s rushing in to get high returns, rushing out as a result of emotion, or rushing into a decision as to where to invest, before diving in pause, take a deep breath, sleep on it, and then make your decision. As a “subset” of this commandment, I would also include: Be careful when listening to others. What’s good for one person is terrible for another. The media does a great job of generalizing advice and investments, and I think that’s an awfully dangerous game to play.
Unless someone really understands your personal situation and goals, I firmly believe it’s nearly impossible to make conclusive and general statements as to “what’s good” and “what’s bad” for you. No good doctor could ever diagnose a problem without getting the answers to some basic questions. If they fail to do this, prescribing a pill can literally kill you. The same is true with investing. Only when a few key questions are answered could anyone really give prudent advice on “what’s good” or “what’s bad” for you. So the next time someone tells you to “stay away from this” or “you should invest in that” be careful. Educate yourself, assess the advantages and disadvantages of the advice you’re getting, pause, then make your decision. By doing so, chances are you’ll make the right one.
Here is the rest of The 10 Commandments of Investing. It’s a good read if you are just beginning or really, if you want to evaluate the choices you have already made.