12 GOLDEN RULES OF INVESTMENT
  1. CHOOSE SIMPLICITY: Invest in easy to understand, solid and enduring companies.
  2. MAKE YOUR OWN INVESTMENT DECISIONS: Professional investors foster the belief that investing is too complicated for the average person, because their income is based on commission.
  3. TEMPERAMENT: Don't own stocks that would cause you to panic when the market is shaky; do your homework and keep cool.
  4. PATIENCE: It is the slow get-rich-scheme of buying for the long term after studying business earning capacity and future prospects that matter.
  5. BUY BUSINESS NOT STOCK: Analyse a company, stocks are only a representation of the company.
  6. DOMINANCE: Buy into companies that stand out from their peers
  7. CONCENTRATE YOUR STOCKS: Experts will tell you to diversify, i.e. buy only in a few companies and invest a lot in them.
  8. IGNORE THE PRICES: Checking stock prices daily can raise your blood sugar thus prompting you to buy or sell. Only check business performance i.e. management, earnings, cash flow and future prospects.
  9. BUY LOW: When the shares of a good company fall. don't hit the panic button, but buy big time.
  10. MANAGEMENT: Ask yourself "who is in-charge here?". "Is the management and board working to enrich themselves or shareholders?", "Is it frugal or spendthrift?".
  11. FEAR AND GREED: When most investors are greedy be cautious. When they are fearful be greedy - but only if the investment meets your criteria.
  12. READ AND THINK: Read a company's annual report for facts that will fuel your independent thinking and reasoning.
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