FAST FIVE: 15 Investing Rules To Win The Long-Game
However, to understand why the “rules” are important, one must first understand the definition of “risk” as it relates to investing. Howard Marks previously penned a great piece on this concept.
On his right shoulder is sitting an angel in a white robe.
It consists of doing the right thing at the extremes which is the contrary of what everybody else is doing. So unemtionalism is one of the basic requirements for contrarianism.” It is not surprising with markets surging off the March lows, the Fed flooding the system with liquidity, and the mainstream media trumpeting the news, individuals became swept up in the moment.
The 15-Rules Cut losers short and let winner's run. (Be a scale-up buyer.) Set goals and be actionable. (Without specific goals, trades become arbitrary.) Emotionally driven decisions void the investment process. (Buy high/sell low) Follow the trend. (80% of portfolio performance is determined by the long-term, monthly, trend.
Such will then change portfolio allocations to be either “neutral or short.” BUT, and most importantly, until that violation occurs, portfolios should remain either long or neutral.