“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.