Seventeen Investment Rules

Random Roger publishes his seventeen investment rules.  I like folks who make the world of investing real to the rest of us so I'm publishing this excerpt with my highlights.  

1)......Your family and your health are at least two things that are more important than your money  and you may have more.

2) Every so often the capital markets will go down a lot and scare the hell out of a lot of people as if it's never happened before. Knowing/remembering this ahead of the next one should make them easier to endure. In 2008 people thought the financial world was literally ending. Anyone not lucky enough to have reduced exposure early on but gutsy enough to not to have panic sold should now be back to even. No growth for five years is not a great result but it is not ruinous for someone who is able live within their means.

3) And while we are at it, live within your means. Better yet live below your means. A $4000 lifestyle is much easier to replace in the face of some sort of personal shock than a $10,000 lifestyle......

4) Your investment strategy will not always work the way you hope. No single strategy can possibly be the best for all markets; that includes yours and mine...... 

5) What your investment strategy should do is provide a combined reasonable chance for allowing you to have enough when you need it while allowing you to sleep most of the time (or all of the time if possible). 

6) Youshould exercise  vigorously, regularly and most of it shouldn't be enjoyable.....

7) When a particular segment of the market has a panic or a crash or some other nightmare your holdings in that particular segment are going to participate in that panic or crash or some other nightmare. Everything that has gotten hit hard in the last few weeks has been hit hard before and will get hit hard again at some point in the future. That they will get hit again in the future means they are not going to zero now.

8) Get a dog and then get a dog for your dog. The benefits are immeasurable. {My comment this is so true.  I miss my dog every day!  I don't know about having two though}

9) Don't forget what large declines feel like. For years I have contended that people somehow forget what it feels like to endure a large market decline, they react like it has never happened before which results in panicked action......

10) Don't drink soda. You don't have to be a diet nazi to eat fish once or twice a week, eat fruit everyday. eat a salad everyday and avoid soda.

11) You don't need 20% in gold, other commodities, REITs, MLPs, absolute return, private equity or any other specialized segment of the market. All of the above can be valid parts of the market to include in a diversified portfolio but too often people end up finding out they had way too much exposure at the wrong time. 

12) Volunteer somewhere....... 

13) This time is not different. The details causing something to happen in markets might be different but the emotions of fear and greed are still driving prices just like they always have.

14) Don't wish away the week to get to the weekend, you end up wishing away your entire life that way. If you dislike your job so much that you do wish away they week then you need to find something else to do. This is not a call to go in on Monday and scream "I quit" but instead start working on a plan to make a change even if it takes months or years. You will eventually get to where you want to be and even just the process of getting there can relieve whatever negative feelings you take from the job you are trying to change.

15) True bear markets start slowly over a period of months, they do not start with crashes. Both the tech wreck and the Great Recession started this way.

16) Life is about the journey not the destination. ...

17) You have more control over your spending and saving than you do returns in the market. If over the next ten years global equities compound at just 2%, you will not compound at 10%....

Whoever this guy is I already love him!  I've added him to my must read list every day!  Link:  Random Roger: 20 Rules for Investing and Life.