List of Investment Mantras

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Finance and Investing > Forum > List of Investment Mantras

List of Investment Mantras
venkataramanan, Professor, India, Member
Let's collect a list of investment mantras here!
If possible, let's also add the circumstances / market conditions that make them valid (or not).
1. "When confident, concentrate; when doubtful diversify". When is this considered a sensible advice?
2. "Don't put all your eggs in one basket". In what kind of circumstances is this a smart strategy?
3. "Buy at bottom + 1 and sell at top -1". Is this a good strategy? If not why? If yes when?
 

 
Investment Mantras: 4. Keep your Eyes Open - a Mantra Worth Keeping in Mind
Vakhtang Kelbakiani, Student (University), Georgia, Member
4. "Keep your Eyes Open. Base your theory on facts. Don't filter facts to suit your your theory".
I found this one in an investment book. Says that you should keep digging and even one deviation from your theory can be a valid reason to make a new assumption and a new theory.
The investor faces a time versus safety dilemma.
 

 
On #2: Don't Put All your Eggs in One Basket
Hijab Naqvi, Student (MBA), Pakistan, Member
Don't put all your eggs in one basket is a particular smart strategy when the company's financials are fluctuating and you are not sure about the company's profitability trend in the future, or in the past the company's financial performance was not very strong.
 

 
On #2: Don't Put All your Eggs in One Basket
venkataramanan, Professor, India, Member
The above sentence puts in a nutshell the concept of diversification in order to reduce one's risk.
 

 
5. Don't Fight the Fed
michael cook, Analyst, United States, Member
This is a mantra, a "slogan" if you will, not a strategy.
I can't think of a situation in which an investor would want to "fight" the Fed.
 

 
Taxation Mantra (Personal & Business): Pay and Forget
venkataramanan, Financial Consultant, United States, Member
As far as taxes are concerned "Pay & forget" is a better maxim than "Save & suffer", due to stress.
The advantage is that the time spent to think of and pick up loop holes most of the time leads to litigation and consequent stress.This time can better be used to find out ways to reduce cost which will ultimately improve profitability.
 

     
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