Rule #9: Focus on What You Can Control
Investors know the hazards that occasionally face our world: war, soaring oil prices, geopolitical turmoil, economic uncertainty and market fluctuation. As an investor, you can’t control these things. That’s the bad news. The good news is you don’t have to.
Investment predictions are not the key to success; instead we believe the key is basing your decisions on investment principles, the most important of which are the:
- Quality of the investments you own
- Diversification of your portfolio
- Holding period for your investments
That's why, when you outlook is filled with uncertainty, our advice is to focus on the things you can control.
Keep Your Emotions in Check
We believe the most important thing you can do as an investor is to not get distracted by emotion – good or bad. Too often, investment decisions are rushed by emotion. Don’t get distracted by the latest headlines. The world always has its share of problems, and there are always reasons not to invest. On the other hand, just because a particular investment has been performing really well for a few years and all the news is good, you shouldn’t rush into it.
Everyone can get carried away by emotion. Just don’t make emotional decisions where your money is concerned.
Diversification does not guarantee a profit or protect against loss.
