10 Investment Rules

Years ago Bob Farrell developed ten great investment rules.  The folks over at Pragmatic Capitalism.com a few weeks ago did a visualization to those rules.  I think it's a good read & I think you should follow the link at the end of this post and give it a once over.  The article is too long to excerpt so I'll give you the 10 rules and send you over to them for the meat of the whole thing.

1.  Markets tend to return to the mean {average price} over time.

2.  Excesses in one direction will lead to an opposite excess in the other direction.

3.  There are no no eras-excesses are never permanent.

4.  Exponential rapidly rising or falling markets usually go further than you think,  but they do not  correct by going sideways. 

5.  The public buys the most at the top and the least at the bottom.

6.  Fear and greed are stronger than long-term resolve.

7.  Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names.

8.  Bear markets have three states-sharp down, reflexive rebound and a drawn-out fundamental downtrend.

9.  When all the experts and forecasts agree-something else is going to happen.

10. Bull markets are more fun than bear markets.

Link:  Visualizing Bob Farrell's 10 Investing Rules.