Most Essential Investment Rules (2017 Update)

Essential Investment Rules
Essential Investment Rules

Few Most Essential Investment Rules You Must Follow

Which is the most essential rule during investment? Does it entail purchasing safe stocks? Or, does it involve substantial future plans?

Generally, we do not have a one particular essential rule of investment. Instead, we have several rules that must be observed collectively to achieve the most desired results. Besides, different experienced investors have individual rules they critically observe. That means almost all investors have their own adored core principle of investment.

Selena Maranjian said, “The most essential rule of investment is to learn.” According to this expert, investors should learn new trending market and investment ideas every day. Beginners in investment must learn the basics of stock investment, as well as the benefits obtained from holding shares in a profitable company. Any caring investor must observe simple but essential principles like buying stocks in well-established enterprise and observing stock diversification. Furthermore, you should maintain a regular check on your holdings to help detect any enterprise incapability at an early stage.

Learn New Investment Strategies Every Day

Learn and gain experience throughout your investing life. People learn in several distinct ways. Many beginners learn from their mistakes. If you are just starting your investment journey, be ready to encounter ups and downs – it is very rare to go through the journey flawlessly.

Some common mistakes beginners find themselves doing include frequent purchase of stocks without necessarily pausing and re-strategizing, continuous bailing even after a drop in the market or stock, risking heavily by purchasing stocks on margin etc.

You can as well learn from the experts, so it saves you from making certain petty mistakes. Even Warren Buffett accepts that he obtained most of his knowledge from Charlie Munger. “You better buy a greater company at a reasonable price, than purchase a fair company at a huge price,” says Munger.

Buffet intelligently used Munger’s investment approach and other skills acquired in the process, to develop the most profitable enterprise. Munger also said, “The game of life is the game of eternal learning.” At least, he also got his victory from other professional investors that came before him.

The thing is- for you to have a successful investment strategy and substantial excellence, you must always be ready to learn, and learn and learn.

Consider Safety during Investment

This is an essential rule that was put forward by Ben Graham – the founder of value investment. He explained the necessities of buying stocks at a value less than their intrinsic values. Investors are advised to go for an investment after establishing that they will not run a big loss when things go wrong. The only emphasis is here is- never neglect the negative side of the investment. As you focus on possible profits, also remember the imminence of a loss.


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