Hi Guys,
Risk is the other side of the investment equation. Increase the likelihood of high returns is usually tightly coupled to additional risk. That's the nature of the beast. A few years ago I was introduced to a simple set of investment rules assembled by The RiskMetrics Group. The rules were unique in that instead of the conventional 10-rule set, The RiskMetrics Group simplified still further by advocating only a 9-rule set. Here is a Link that summarizes that 9-rule set:
http://thereformedbroker.com/2014/04/29/9-rules-of-risk-management/I was a little surprised that The Reformed Broker website did not know the originating source of this material.
These top level rules are very general and generic. Hopefully, when consistently applied, they will guide your decision making. I especially like rule 8 to use common sense. It is better to be approximately right, then to be precisely wrong. Nobody is prescient enough to truely maximize returns in a portfolio. Trying to be too precise can get an investor into real trouble; simple is always better than complex investment approaches. Like in tossing horseshoes, being close enough is often a winning strategy. Good luck to all on being close enough.
Best Regards
