This week's tips come to us from Contravisory Investment Management. Ed Noonan, the firm's founder, developed these investing mantras after over 38 years in the industry.
- An approach which protects capital is the foundation of capital growth.
- Be skeptical of market pundits – they often suffer from a pride of personal opinion.
- Information is constantly changing; remain flexible in all investment operations.
- In seeking to avoid the dangers of crowd action remember that a majority of opinion can be sustained. Unanimity of opinion is more vulnerable to a contrary surprise.
- Never average down; you may be expanding a mistake more than opportunity.
- Be wary of "cheap" stocks (they have a knack of getting cheaper); "expensive" stocks are more often the winners.
- We all have biases; identify yours and how to use it to your advantage.
- Invest with the trend, not with the news.
- Superior returns are more likely when investing with the market leaders.
- Patience is a virtue when investors seek to identify long-term trends.
