Hi Guys,
Most market gurus offer a 10 set of rules to guide investment decision making. In his book, The Successful Investor Today, Larry Swedroe does them 40% better by generating a 14 set of investment truths. The book was published in 2006; I hope Swedroe hasn't changed his truth set since that time. Here is my very brief summary of these truths.
1. Active investing is a loser's game.
2. Past performance of an actively managed fund is a poor signal of future performance.
3. Since skilled professionals seldom succeed, it is highly unlikely that individual investors will.
4. Wall Street and the media's interest are not the same as those of individual investors.
5. Risk and reward are correlated.
6. Costs matter.
7. Stop trying to beat the market to achieve above average returns.
8. Buying individual stocks is pure speculation.
9. Reversion to the mean is a powerful and constant market force.
10. Forecasts are folly and have zero value.
11. Taxes are often an investor's biggest expense.
12. Knowing financial history serves an investor well.
13. International asset diversification reduces portfolio risk.
14. There is no one right portfolio, but there is one right portfolio for you.
These are my interpretations of the lessons documented in Swedroe's book. Therefore, I'm sure they are not precisely what Larry Swedroe meant, but they are likely a very close approximation.
I hope this helps, and perhaps even inspires you to check the book itself. No, that's a step too far.
Best Regards
