I’ve worked in finance for ~6 years.
I’ve also spent over 3,500 hours discussing investing with experts.
99% of investment advice can be boiled down to these 21 sentences:
I’ve also spent over 3,500 hours discussing investing with experts.
99% of investment advice can be boiled down to these 21 sentences:
1. Picking stocks is fun, but you’ll probably lose money. 90% of people are better off focusing on indexes like the S&P and Total Stock Market.
2. If you want to get rich, invest with weeks in mind. If you want to build wealth, invest with decades in mind.
2. If you want to get rich, invest with weeks in mind. If you want to build wealth, invest with decades in mind.
3. 1,000s of people try to predict the stock market. One of them will eventually be right. This doesn’t mean they knew it.
4. Investing is 10% buying and 90% patience.
4. Investing is 10% buying and 90% patience.
5. Losing money investing hurts more than making money investing. Remember this when you take risks.
6. Prices will always correct themselves even if it’s years in the making.
7. Knowing a little about 50 companies won’t make you money, but knowing a lot about 5 companies will.
6. Prices will always correct themselves even if it’s years in the making.
7. Knowing a little about 50 companies won’t make you money, but knowing a lot about 5 companies will.
8. Personal finance > Investing. Prioritize your money over your investments.
9. The stock market’s movement shouldn’t determine your investment strategy.
9. The stock market’s movement shouldn’t determine your investment strategy.
10. The stock market has averaged 10% a year over its history. If you want to estimate portfolio growth aggressively, use 10%. If you want to be conservative, use 8%.
11. Don’t put more than 5% of your portfolio in a single stock.
11. Don’t put more than 5% of your portfolio in a single stock.
12. The less you understand your investments the more likely you are to lose money.
13. A falling stock price is not a good reason to sell. Focus on the business, not its market movement.
13. A falling stock price is not a good reason to sell. Focus on the business, not its market movement.
14. It doesn’t matter if you own index funds or individual stocks. If you don’t control your emotions, you’ll still lose money.
15. Bull and bear markets call for celebration. It just depends on how you interpret them.
15. Bull and bear markets call for celebration. It just depends on how you interpret them.
16. Rebalance when small positions decrease by 25% or large positions decrease by an absolute 5%.
17. If you need money in less than 3 years, don’t invest it. If you need it in 3-10 years don’t invest in 100% stocks. If it’s any timeframe above that, invest however you want.
17. If you need money in less than 3 years, don’t invest it. If you need it in 3-10 years don’t invest in 100% stocks. If it’s any timeframe above that, invest however you want.
18. You’ll never be able to remove your emotions from investing, but this doesn’t mean you can’t control them. Have an investment plan and stick to it rigorously.
19. If you want bonds in your portfolio invest the difference of 120 - [your age] in stocks and the rest in bonds.
19. If you want bonds in your portfolio invest the difference of 120 - [your age] in stocks and the rest in bonds.
20. Stocks are short-term risky but long-term safe. Bonds are short-term safe but long-term risky.
21. Volatility and uncertainty are the price you pay for high investment returns. It’s always worth paying.
21. Volatility and uncertainty are the price you pay for high investment returns. It’s always worth paying.
Thank you for reading!
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