Do you want a chance to win $100? Comment on this post by May 31 with your 100-word (or less) response to the following question:
Which of John Templeton’s 16 Rules for Investment Success is your favorite and why?
In a previous post, we highlighted these rules for investment success, written for the World Monitor in 1993. The sixteen rules are:
- Invest for maximum total real return.
- Invest–don’t trade or speculate.
- Remain flexible and open-minded about topics of investment.
- Buy low.
- Search for bargains among quality stocks.
- Buy value, not market trends or the economic outlook.
- Diversify.
- Do your homework or hire wise experts to help you.
- Aggressively monitor your investments.
- Don’t panic.
- Learn from your mistakes.
- If you begin with a prayer, you can think more clearly and make fewer mistakes.
- Outperform the market by making investment decisions that are better than the professionals who manage the big institutions.
- An investor who has all the answers, doesn’t even understand all the questions.
- There’s no free lunch.
- Do not be fearful or negative too often.
To enter the contest you must submit your entry no later than May 31. Entries must be in English and original works written by yourself that have not been previously published. Spelling, grammar, and clarity will be considered in judging.
We will pick our favorite entry by the end of the following week and notify winners via the e-mail address supplied in the comment field (so be sure to include one!).
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Number 12 is my favorite. It reminds me to look at my goals when investing and then ask myself if they are in line with God’s will. If not, greed may be ruling my decisions. And greed easily leads to terrible investments. But if integrity and prudence are ruling my decisions, I’m much more likely to make wise and successful choices.
However, number 1 is a close second simply because many people don’t grasp the concept. Total return and real return are essential for reaching your goals and consistently beating inflation.
[...] Words for $100 Templeton Press is running a new contest on our What Would John Templeton Say blog. In 100 words or less, readers are asked which of John Templeton’s 16 Rules for Investment [...]
Number 4 is my favorite: Buy low… at the point of maximum pessimism. This seems like common sense, but emotionally it can be very difficult to do when everyone else is selling and things look darkest. For value investors, or bargain hunters, it’s important to remember that “crisis equals opportunity.” We must be ready to act , intellectually and emotionally, when adversity strikes, there is panicked selling, and stock values drop dramatically.
Hello Matt,
Please delete my first comment sent at 10:49 a.m. I cleaned it up a little bit and resent it at 10:54 a.m. Please use that one for your comments and contest.
Thank you,
Howard
My favorite rule is “Don’t Panic.” Besides being a fabulous song by Coldplay, it is an adage that, much like “Buy low, sell high”, far too few investors follow. All too commonly, when an unexpected situation comes about, panic sets in, investors sell out of positions and find themselves with a small sum of cash and little to show for it. Instead of panicking, follow your head (not your heart!) and seize the opportunity. And as Chris Martin says, “there’s nothing here to run from”—as long as you don’t panic.
15. Though simple, this rule delivers a lesson reaching far beyond finances. “There is no free lunch”, but there is a cheap lunch. Small decisions like packing lunch reinforces the best mindset for saving. Most of us won’t become a guru or even beat the market, but success will come in living frugal. Without that foundation, our investment decisions will mean far less. Further, packing your own lunch is far more likely to involve healthy choices. Without your health, money isn’t worth much.
11. Learn from your mistakes.
Where would the human race be without learning? And where is learning more prominent? In past mistakes of course. Consider a martial artist. He learns to block from being hit. Being hit is a rather uncomfortable experience, but out of it he becomes more professional and increases his mastery of the art. I truly believe mistakes are the essential steps in the climb to mastery and success. Testing the market with small money can be a great tool for learning specifically because of this reason. One is able to inccur mistakes without substantial loss and thus learns.
Good Morning Matt,
Which entry did you select as the winner?
Thank you,
Howard