What are the simple rules of investing?

“Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market”- Warren Buffett

In the long run, your investments will survive and prosper if you rely on a few simple rules –

Time is your friend – Give yourself all the time you can . Even modest investments in tough times will help you sustain the pace and will become a habit. Compound interest is a miracle.

• Impulse is your enemy – Eliminate emotion from your investment program. Have rational expectations about future returns, and avoid changing those expectations as the seasons change.

 Basic arithmetic works – Keep your investment expenses under control. Low costs make your task easier.

 Stick to simplicity – Don’t complicate the process. Basic investing is simple—a sensible asset allocation to stocks, bonds, and cash reserves.

More reading – Warren Buffett Rules: Golden Rules For Investing in Stocks

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